OUR ANALYST OF THE WEEK- Dareen Mostafa El Arousy, senior equity analyst at Sigma Capital (Linkedin).

My name is Dareen El Arousy and I’m an analyst to my core. I’ve been in the financial field for the past seven years. I started off in research, but quickly moved to the credit risk department at QNB before joining Dar Al Mimar as a real estate strategic planner. While my time there was enjoyable, I felt I was too young to specialize in just one sector as I was still curious about other fields and everything else happening in the world. I decided to transfer to Sigma and that is where I’ve been for the past two and a half years.

My favorite thing about Sigma is that our head of equity research AbouBakr Emam lets us work in all sectors. He likes to tell us “if you’re an analyst, you’re an analyst for all industries.” I work in everything from consumer staples and consumer discretionaries to contractors and industrials. We’re also a very close team and work together comfortably and without any competitiveness.

The best thing about the research field is that you have ownership of your work. Your research holds your name and your credibility and when you help people make money, they treat you like a hero that just saved their lives. It’s also great to always be updated and feel like you have a hand in creating the news in the market.

I always tell new analysts to put their own wealth into the stock market. The worst thing about the job is feeling the pressure and impact of your work and your recommendations. I imagine that these people could be my mom or my relative and they’ve trusted me with their wealth. That’s why when you put your money where your mouth is, you get a better sense of what investors feel and learn how to empathize with them.

My theory of investment is to diversify your portfolio as much as possible. As the saying goes, never put all your eggs in one basket. You have to have a clear target lined up and then prioritize asset classes from there. You also have to set a strategy and know from the very beginning when you’ll enter and when you’ll exit, which often means integrating technical, fundamental, and quantitative calls together.

For new investors in the market, my advice is to set your expectations. People think that once they go into the stock market, they’ll immediately make 5x returns, but it doesn’t work out that way. Their decisions must be disciplined, with a clear entry point, target return, and stop loss. They also have to have a general overview of the market and read a lot to both stay updated and create your own educated point of view.

The thing I focus on most before recommending an investment is the risk surrounding it. You can take the girl out of the risk department, but you can’t take the risk department out of the girl [laughs]. You should hope things go right, but at the same time you always need to be aware of how things can go wrong and what your limitations for loss are. It takes time to assess the risk tolerance of clients, but once we do, we use it to determine which investment is most suitable for their needs.

I think 2021 will be a better year for Egypt than 2020. 2020 was the year of retail investors in the Egyptian market, and it proved very volatile. I follow a few social media groups where the participants discuss investment in EGX and it was crazy to see that even though the posts are often inaccurate, they have a large impact that we see in the day’s trading. We’re hoping this year’s potential new IPOs will bring institutional investors back into the market. We’re also thinking that people might begin to see the stock market as a more attractive venture as banks begin to lower rates for savings.

That isn’t to say that 2020 was a bad year — on the contrary actually. During the peak of the pandemic we all sat together and started running scenarios of what we think could happen in industries, companies, and the overall market. We were worried about problems within supply chains and loss of demand for oil, and our scenarios reflected that. However, almost all of the companies outperformed our predictions and had a faster than expected recovery, so we were pleasantly surprised then. That’s the approach I’ll take for this year, hope for the best and see what happens.

I love reading. My favorite books are 1984 by George Orwell and The Forty Rules of Love by Elif Shafak. I love Orwell as a writer as he’s always been ahead of his time. He might sometimes go to the extreme to explain his points, but they’re still accurate and timeless in how they translate into the current society we live in. As for Shafak’s beautifully written novel, it gave me more insight into how I see love and how to be more aware of my actions and beliefs. I also really enjoyed The Help by Kathryn Stockett and Utopia by Ahmed Khaled Tawfik.

The last great thing I watched recently (even though I’m late to the party) is 12 Angry Men. It’s probably one of the best movies I’ve ever seen. The film is very simple and to the point, and shows you how to analyze and look at situations. Of course, the TV series Friends will always be my comfort zone no matter how many times I watch it.

I’m not someone who was born with a clear talent, so I tried a lot of things. I’m very passionate about photography, reading, and taking walks in green areas. I tried yoga, but I think I’m not peaceful enough for it, so I ended up practicing body combat instead [laughs].

I also started to learn piano. I had been asking my mom why she never taught me any sports or music when I was younger. She gave me a look and told me you’re old enough, learn whatever you want now. Her words hit me, and I decided to enroll in a piano class. My last exam was playing Old Macdonald Had a Farm, which I was very proud of.

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The EGX30 ended today’s session flat on turnover of EGP 1.05 bn (27.8% below the 90-day average). Foreign investors were net buyers. The index is down 1.0% YTD.

In the green: Orascom Financial (+6.0%), Pioneers (+3.5%) and Orascom Investment (+2.4%).

In the red: Eastern Co. (-2.6%), Oriental Weavers (-1.5%), and MM Group (-1.3%).