OUR ANALYST OF THE WEEK- Hesham Hamdey, research analyst at Naeem Holding for Investment (LinkedIn).

My name is Hesham Hamdey and I’m a research analyst at Naeem Holding for Investment. I have more than five years of experience, mainly in financial modeling, equity valuation, and economic analysis. I cover multiple sectors including telecoms and consumers (which has F&B and consumer durables under its umbrella) and recently started covering cement stocks as well. I also analyse economic indicators such as inflation in Egypt and its impact on investment.

The most interesting sector I cover is telecoms as I’m very interested in their NBFS and e-payments businesses. The sector has so much potential and I think it will begin to materialize more in the coming years. Financial inclusion is extremely important for economic growth. Given that a huge percentage of the population is unbanked, banks have excess liquidity that is being underutilized. NBFS has already greatly opened the financial services sector to the unbanked, but firms offering microfinance and installment plans have proved that there’s significant demand for these services as well.

The best part of my job is the knowledge I acquire. I’m aware of so many areas of the market and economy that I never would have imagined I would be engaged in. Every sector has its specifics and dynamics and it’s very interesting to have an overview on each one and how they interact with each other.

The worst part of my job is that I often can’t disconnect my mind from work. I’m always thinking about the news or what I still need to do. However, I enjoy my job a lot so I’m not too mad about it.

My theory of investment is to go for stocks that have a lot of movement. A lot of the time in the EGX, there isn’t much rationale between the fluctuations, but the fact that they’re there gives an investment a lot of potential. Nonetheless, this only works if the firm has good fundamentals and a strong outlook.

Something I look at before recommending an investment is the intensity of regulations in the sector and how much these impact businesses. It can really make a huge difference on future performance. The auto industry for example changes in fees, license requirements, regulations on two and three wheels, or even trends in natural gas and EVs all have a direct or indirect impact on auto stocks.

I don’t think 2021 will be the year of Egypt. Comparatively to other countries, we rode the wave pretty smoothly this year, but these weren’t the targets we had set for ourselves pre-covid. We were also hit by imported inflation on account of the commodities boom that is taking place globally. It’s worrisome since the central bank will have less room to cut interest rates in the coming period which will impact GDP growth. Our saving grace will probably be tourism as increased foreign currency inflows could help it lower yields on T-bills, which will in turn propel portfolio managers to reallocate parts of their portfolio to the EGX. Instead, I expect the recovery to continue picking up steam next year, setting us up for 2023, which could be the year for Egypt.

If I had to switch and cover another industry, I would choose banking. It’s extremely related to daily life and you can see its impacts almost immediately.

Given the chance, I don’t think I would switch careers. Becoming a financial analyst was my dream job from early on, so I’m quite pleased with where I’m at. At one point I was considering mechanical engineering, but that never manifested.

I don’t watch much TV, but my favorite movie is Interstellar. I go back to it time and time again and I don’t get bored. I also enjoyed the show Chernobyl. The last great thing I read is Possible Worlds: An Introduction to Logic and Its Philosophy.

When I’m not on the clock, I like to go out with friends, read, or go to the gym. These days though I’ve been studying a lot since I’m working to get my CFA.