OUR ANALYST OF THE WEEK- Mohamed Rady, investment banking senior associate at Zilla Capital (LinkedIn).

My name is Mohamed Rady and I’m an investment banking senior associate at Zilla Capital. I graduated from AUC, where I majored in accounting and minored in economics. I started my career as a transactions and advisory team intern at PwC before exploring the banking sector as an equity trader. I then became a private equity analyst at Catalyst Partners Egypt, where I discovered my passion for investing. Following my tenure at Catalyst, I joined Zilla Capital, where I’ve been happily working for the past two years.

For me, investment banking is truly fulfilling. It’s a dynamic and intellectually stimulating sector, where I’m constantly exposed to new industries that pose interesting challenges. I also love the interaction with management teams from different companies. I get to meet people from all walks of life.

Don’t get me wrong, the job comes with challenges that require you to think outside of the box. Understanding firms’ value propositions and how to differentiate each company from its competitors, and the specific financial and legal constraints that come with each potential investment is no walk in the park. But the challenges make me enjoy investment all the more.

The worst part of the job is pulling all-nighters, and personally investing in a transaction for a long time and then just having it fall apart through no fault of your own. There’s a lot of stress from managing various stakeholders, as well as having to work under the pressure of tight deadlines. You have to be persistent and adaptable to cope with the requirements of this job.

I personally believe that 2022 will be a good year for investment in Egypt. I believe the trend in investment banking will be robust M&A activity, building on what we saw last year. I also think the state privatization program will be crucial in increasing liquidity and reviving trading volumes, thereby attracting more institutional and foreign investors to the Egyptian market. Of course, investor hesitancy is surging amid the war in Ukraine, but Egypt continues to outperform other emerging markets.

Sectors that I think are gems with a lot of potential are F&B, FMCG, healthcare, and education. We’re noticing a lot of interest from investors to tap into these underserved markets. Consumption is increasing, and the macro indicators are improving, so there’s great potential for growth when it comes to the consumer sector. Tech is also part of the outlook for sure: E-commerce, fintech, and similar sectors proved their resilience during the pandemic.

My first step before I decide on an investment is to assess the management team of the target company. Then I look at its financial indicators and potential for growth. Finally, I thoroughly study the company’s structure: How can it onboard investors and does it have a clear exit strategy? If those all line up, I can confidently recommend the investment.

My theory of investment is having a balance between risk and reward. That doesn’t mean that I’m on the conservative side, per se. When you invest in a company, you’re creating value, and when you exit eventually, you’re going to IPO based on the value you create. So it’ s only logical that the return should be proportionate to the risk profile you accommodate.

The last great thing I watched was Succession on OSN. The show brilliantly portrays conflicts and power struggles within this unorthodox family of media moguls. Aside from the great acting and sublime soundtrack, the show also captivated me because it partly focuses on M&A and investments in general [laughs]. One of the best series I’ve watched in a while. [EDITOR’S NOTE: We concur, and we definitely don’t bang on about Succession whenever we get the chance.]

I’m currently reading Icarus: The Life and Death of The Abraaj Group by Brian Brivati. Based on interviews with key personnel, the book explores what the Abraaj Group was trying to do through impact investing, how it was portrayed by the media, and how it ultimately fell apart. A very interesting read.

In my downtime I enjoy playing padel tennis and football. I’m also passionate about cars, so naturally I follow Formula One. To disconnect from work, I go out and travel with my friends whenever I get the chance. That is, of course, when I actually have down time [laughs].

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MARKET ROUNDUP-

The EGX30 rose 1.2% at today’s close on turnover of EGP 1 bn (0.3% below the 90-day average). Foreign investors were net sellers. The index is down 5.6% YTD.

In the green: Eastern Company (+7.8%), Heliopolis Housing (+5.9%) and Rameda (+5.6%).

In the red: CIRA (-0.7%), Abu Qir Fertilizers (-0.5%) and CIB (-0.2%).