OUR ANALYST OF THE WEEK- Omar El Watan, investment banking analyst at Al Ahly Pharos (Linkedin).

My name is Omar El Watan and I’m an investment banking analyst at Al Ahly Pharos. I’ve worked in similar roles at Zilla Capital and BKR Egypt. I graduated from Telfer School of Management at the University of Ottawa and I thought I would continue to live in Canada, but I eventually came back because ‘Om El Donia ghalya 3alaya’ [laughs].

Investment banking gives you new exposure every time you get a new mandate, which makes the job very interesting and full of things to learn and explore. It requires a keen eye for analysis and the linguistic ability to tie the narratives to the numbers. Investment banking is also a people’s job in that you have to get up close and personal with shareholders and management and try to have a good relationship with them. It’s a bit of everything and there really is nothing like it.

The worst part of my job is working on a transaction for so long and then just having it fall apart. Sometimes it’s due to the macroeconomic climate, other times the shareholders and new investors don’t see eye to eye — so oftentimes it’s something completely out of your control and you have to pick yourself up, dust yourself off, and start all over again.

The trend in the investment banking industry this year is to invest in defensive sectors. We’re seeing a lot of investments in F&B, healthcare, and education. Non-banking financial services are also getting a lot of attention, as well as any company that is linked to commodities.

I don’t see investors being more bullish on Egypt in the immediate future. Economically, we’re doing just fine, but there are still factors keeping the market bearish such as global risks, conflicts abroad, and the interest rate environment.

A sector I think is a gem is e-commerce. Anything that uses tech to enable individuals and simplify processes is the future. The VC culture is all over this because it’s high risk, high reward. Egypt in general has a lot of potential in this area. We skipped the industrial era, but we’re all over the internet era. Companies and legacy firms need to understand the importance of tech and incorporate it into their thinking. I think if this happens, it will be an inflection point for the country where we can only go up from here. However, I don’t see this happening in the next two years.

There are three important factors I look at before I decide on an investment. The first is competitive edge: Having something that differentiates the company and can’t easily be replicated. The second is competent management with a good corporate governance structure. Finally, a company has to have high growth potential in terms of the industry it works in.

My theory of investment is to search for high risk, high return investments… with good fundamentals. Maybe it’s because I’m young [laughs]. I think private investment is a really good way to go as it’s extremely beneficial not just monetarily, but also impact-wise. At the same time, you should have a traditional investment such as real estate to fall back on.

The last great thing I watched was a documentary by Al Jazeera Investigations called The Men Who Sell Football. It had a really interesting part that looked at how FIFA rigged the game in Africa. I highly recommend it.

I’m currently reading Meditations by Marcus Aurelius, the Roman Emperor during 161–180 CE. It talks about Stoic philosophy and it teaches a different mindset and how to look at things when they’re out of your control.

In my downtime I like to play padel tennis or try new places to eat. I’m just a typical ‘shab’ [laughs]. I also try to stay active as much as possible. This is all when I do have the luxury of time, of course [laughs].

---

MARKET ROUNDUP-

The EGX30 fell 1.7% at today’s close on turnover of EGP 837 mn (18% below the 90-day average). Local investors were net buyers. The index is down 5.4% YTD.

In the green: Eastern Company (+1.4%), Qalaa Holdings (+0.9%) and EFG Hermes (+0.5%).

In the red: Cleopatra Hospital (-4.4%), Ibnsina Pharma (-4.2%) and CIRA (-4.2%).