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Tuesday, 9 February 2021

Meet Arqaam Capital’s Noaman Khalid

The EGX30 fell -0.65% at today’s close on turnover of EGP 1.37 bn (3.5% above the 90-day average). Foreign investors were net sellers. The index is up 5.56% YTD.

In the green: Pioneers Holding (+2.0%), Eastern Company (+1.0%) and Telecom Egypt (+0.5%).

In the red: Alexandria Mineral Oils (-2.1%), Qalaa Holdings (-1.8%) and SODIC (-1.6%).


OUR ANALYST OF THE WEEK- Noaman Khalid, associate director of macroeconomics, indices, and strategy at Arqaam Capital (Linkedin).

I’m Noaman Khalid and I’m an associate director at Arqaam Capital. I joined last September as I wanted to be exposed to an entity operating outside of Egypt with more clients and coverage. I’m specialized in the economics and commodities industries with a focus on Egypt and Kuwait.

Being a good analyst means having the ability to link events together. It’s not just about being a good economist and understanding macro events, but having the skill to relate it back to how it will impact financial markets. You also have to be able to tailor the macro picture towards the index or market you’re looking at.

The best part of my job is that it's full of action and you tend to see the results of your calls right away. It’s fast paced but the excitement makes you want to take more calls and you get better the more you learn.

The worst part is that you always have to be connected, even during vacations. We don’t have the luxury to take a few weeks off and disconnect from the news. If anything major happens when you’re off, you’ll have to open your laptop and get to work to ensure everyone is updated. Even when Egypt is on holiday, there’s always a market operating somewhere that could have an impact locally.

I don’t believe the roadshow will be dead post-covid, but we may be waiting until the end of this year or the start of 2022 before things normalize. Online meetings aren’t an equal replacement to face-to-face interactions even if they are a bit more efficient. It’s not human nature to only interact with a computer all day.

My theory of investing is to take a long-term call, but don’t become rigid. If you take a fundamental call on a country or a stock and give it time, the reward is much more lucrative than if you had jumped from one stock to another or from country to country. But you still need to be a bit flexible on your long calls, because an event could occur that would change the entire story.

I’m more of a words person than a numbers person. In my opinion numbers assist in formulating a view, but you need to explain things with words. When I talk to investors, I put my forecasts into story-form rather than figures and statistics. Something else I believe backs this up is that while numbers are available to everyone, every firm has its own outlooks and their qualitative analysis of what will happen on the ground is different.

2H2021 could be the turning point for Egypt. Arqaam’s outlook is that Egypt and the UAE will be the most attractive countries in MENA this year, fueled by the vaccine rollout and its global efficiency. Egypt could see a recovery of consumption to pre-2016 levels as purchasing power increases and people begin to see the pandemic pass. This call will have a potential impact on everything from the stock market and consumer stocks to Egypt’s GDP and growth.

The last great thing I watched was a movie called The White Tiger on Netflix. It shows another side of entrepreneurship that’s not a fairytale success story. It gives you a sense that some entrepreneurs or small businesses are born out of the need to escape from poverty and injustice.

The last great thing I read is a Financial Times article titled “Italian mafia bonds sold to global investors”. Seeing the mafia raising funds through official markets is both impressive and sad when taking into account all the ‘zillion regulations’ implemented in the EU on a financial level. It reconfirms that often creativity (even when bad intentioned) will continue to outpace regulators in some way or another.

When I’m not at work, I spend time with my niece, Jamila (aka Jamjam) who’s 3.5 years’ old. Jamila is my favorite human being on earth. We do a lot of activities together such as walking our dog Rusty, going to the club, and cooking.

My calendar has become crucial: My secret to staying organized was to always finish tasks right away. However, between my job and my master’s that’s not always feasible and now I’ve learned how to prioritize tasks and put clear deadlines for myself. When I was younger I used to look at people who were very organized and say “they’re so stiff” but now I realize that being unorganized really brings more stress to your days.

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