OUR ANALYST OF THE WEEK- Mohamed Magdi, vice president of investment research at Beltone Financial (Linkedin).

My name is Mohamed Magdi and I’ve been working in the field for six years. I focus on industrials and telecoms in Egypt, Saudi Arabia, Kuwait, UAE, and Qatar. I started off my career at Prime Research before moving to Sigma Capital and then ended up here at Beltone. I always knew that I wanted this field. I love analysis and presenting my ideas creatively. It’s a job that suits my passions and personality.

As a vice president, one of the most important things I’m tasked with is finding hidden gems. I try to find stories that no one is paying much attention to and seeing if it has potential. There are a lot of stocks listed on the EGX, and retail investors focus mainly on stocks that have a high turnover and liquidity while institutional investors usually go for large or medium caps. So sometimes really good stocks can fall through the cracks.

The best part of my job is knowing everything about some sectors, and some things about all sectors. It’s a job that keeps you aware of all events happening around you, from TV commercials to new products.

The worst part of my job is the working hours. They’re long and unpredictable. There have been incidents where a whole vacation or event was interrupted because I needed to jump back into work right away.

I was not at all a fan of work from home. I found it extremely boring and difficult to stay focused. In Beltone, we’re always interacting with the traders and people from other departments throughout the day to discuss what the market is doing or share news about a stock and I really missed that interaction while working from home. When we got the chance to go back to the office, I was one of the first people to run back to my desk.

My theory of investment is that fundamentals always prevail. They pave the way for a true, consistent, and sustainable investment and we always look for fundamental stories and fundamental trading ideas in companies. Of course, diversification is also very important. The perfect ratio in my opinion is having 20% of your portfolio dedicated to risky trading, while the bulk should be in fundamental investments.

The most important factor I look at before recommending an investment is the management. Even with solid fundamentals, poor management can get in the way of business success. What makes a good management team in my opinion is being aware of everything in the field, including competition, and most importantly being open to change and innovation. A lot of firms opt to stick to traditional ways of doing things and refuse new strategies. Those managers are usually doomed to fail as they fall behind their peers.

Honestly, I don’t think Egypt was dealt such a big hit in 2020 for us to see such a huge rally this year. The country slid through the pandemic somewhat unscathed and even sectors where we thought would be disrupted, like logistics, came out fine. The recovery was quick across most sectors and I think we’re back on track for the most part.

I wouldn’t necessarily say that 2021 is the year of Egypt, but it is the year of manufacturing. The government has taken several measures that have really positively impacted factories and the companies that own them such as cutting gas prices and tariffs.

If I had to switch and cover another industry it would be real estate. The dynamics are close to those of manufacturing since they’re also impacted by global trends. I also feel like these kinds of sectors are the most exciting.

The last great thing I watched was Snowpiercer. It’s not the best show ever, but it came at a time where I needed something to get me through studying for my CFA level 2. It did the trick and I now feel it has a sentimental value to me [laughs].

The last great thing I read was Confessions of an Economic Hit Man by John Perkins. It’s definitely one of the best books I’ve ever picked up. It’s so shocking that at first I thought it was completely fictional and none of this could ever happen, but when he mentioned names some connections began to form. It’s a book that really shows that our field isn’t always based on demand and supply like they say and that other factors are often in control.

When I’m not working, I like to play video games. FIFA especially is my special way to relax and lose some time. I also work out quite a bit. I run, play football, and have started to enjoy paddle tennis as well.

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The EGX30 fell 1.5% at today’s close on turnover of EGP 1.23 bn (1.4% below the 90-day average). Foreign investors were net sellers. The index is down 6.7% YTD.

In the green: MM Group (+2.4%) and Orascom Development Egypt (+1.1%).

In the red: GB Auto (-3.3%), Export Development Bank Egypt (-3.1%) and AMOC (-2.8%).