Press release

"Arab African Investment Management" aims to increase its managed assets to 36 billion Egyptian pounds this year. Negotiations are underway to manage three new investment funds in the near future. Mohamed Mostafa: Choosing the right timing and fair evaluation are the most important factors for the success of offerings. The company is considering establishing precious metals and real estate funds in the near future.

Arab African Investment Management Company, a subsidiary of Arab African International Bank, aims to increase its managed assets by about 20% to reach a size of 36 billion Egyptian pounds by the end of this year.

Mohamed Mostafa, the company's executive director, said in an interview with "Al-Borsa" that the size of managed assets at the end of December last year expanded to 30 billion Egyptian pounds, compared to 20 billion Egyptian pounds at the end of December 2022, with a growth rate of 50%.Mostafa added that the company is currently negotiating with several financial institutions to manage new portfolios, as well as investment funds in addition to the 11 funds currently managed by the company.

Furthermore, the company manages 11 diverse investment funds, including equity, fixed income, money market, and capital protection funds. The majority of these funds are conventional, while some are Sharia-compliant, as the company has successfully managed five new investment funds over the past two years. The number of investment funds managed by the company has increased from six funds in 2021 to 11 funds by the end of 2023. Additionally, the company manages a variety of investment portfolios, including equity and fixed income assets.

The portfolio of funds managed by the company includes five Money market funds: Juman, Iskan, Diamond, Egypt Takaful Insurance, and Al-Fanar, which was recently launched. It was mentioned that the Egypt Takaful Insurance Fund is Sharia-compliant and invests in short-term Treasury bills and deals with long-term Sukuk instruments, while avoiding banking transactions that may raise doubts.

The executive director added that the company is currently negotiating to manage three new investment funds, and if an agreement is reached, they will be launched starting from the second quarter of 2024. He explained that the company focuses on managing these new funds with diversified investment strategies that differ from the investment funds currently managed by the company.

The company has confirmed that it is currently considering establishing investment funds in precious metals such as gold and real estate funds. They pointed out that the market needs new investment funds, especially in the field of precious metals, with investment policies that differ from those currently available in the market. They also mentioned that real estate funds are necessary to improve the investment culture of individual investors in recent years.

They explained that the funds the company intends to launch in the second half of the current year will have higher returns than the existing funds in the market, especially in the categories of fixed income and Money Market funds. The increase in inflation compared to the returns on older funds results in erosion of invested capital.

They emphasized that the company's funds have been able to achieve excellent investment returns for their clients and the funds managed by the company. Many of them have achieved a good ranking among all other competing funds. "Shield" fund is considered the most prominent fund managed by the company in terms of performance during the past year compared to current accounts.

Mostafa mentioned that the company's financial portfolios vary in terms of client structure and investment policy. The company manages investment portfolios for many financial institutions, government banks, insurance companies, as well as retirement and pension funds.

The company is currently in negotiations to manage new portfolios that include stocks and cash for financial institutions and institutional entities. The financial portfolios managed by the company constitute the largest part of its business volume. The company's strategy for the coming period focuses on expanding its portfolio management, according to the CEO.

Mostafa also highlighted the efforts of the Egypt Financial Supervisory Authority in revitalizing the stock market in recent times. The authority plays a role in developing the legislative framework for the market, and its management actively works to stimulate the industry, address its obstacles, deepen the market, and encourage the entry of new institutions to revitalize the demand side and enhance the regulatory framework. However, there are still potential facilitations that can be provided to companies, such as easing and facilitating the listing process for companies and funds in the stock exchange, and activating the market maker mechanism to allow investors to exit whenever they want.

He further explained that there are still demands for more tax exemptions and even the cancellation of taxes on stock market transactions to incentivize investors, as well as granting tax incentives to companies listed on the stock exchange to encourage investments. He cited the experience of the 1990s, which greatly encouraged companies to list on the stock exchange.

Mostafa noted that the previous year was the best in terms of achieving higher investment returns for clients compared to the previous year. The stock market positively responded to events and witnessed a remarkable surge, with the general stock market index achieving exceptional performance. He expects the stock market to continue achieving strong returns during the current year, resulting in good returns on equity funds. On the other hand, fixed income funds have improved with rising interest rates.

He believes that companies planning to offer their shares on the stock market must choose the appropriate timing and fair valuation, as well as consider the targeted investor profile. If good companies are offered at reasonable valuations, they will be attractive to investment funds for subscription. This is not only what funds demand but also what the entire market requires, as investor appetite generally opens up to attractive investment opportunities.

He also pointed out that the sectors represented in the Egyptian stock market do not adequately represent the Egyptian economy, especially the weak representation of the transportation sector. Similarly, sectors such as food, tourism, and agriculture are not properly represented. Additionally, there are sectors that are not represented in the stock market, such as port and airport management sectors.