OUR ANALYST OF THE WEEK- Hadeel El Masry, associate director at Arqaam Capital (Linkedin).

My name is Hadeel El Masry and I’m an associate director at Arqaam Capital. I graduated from economics at AUC in 2013 and during my time at university I undertook several internships at CI Capital. I fell in love with the stock market and how dynamic and interesting it is. You know all the financial, political, and macro news locally and abroad and link it together. After graduation I joined Pharos as an asset management analyst and was taught a lot by my manager Mahitab Orabi and my colleague Mohamed El Menyawi while my position allowed me to cover several stocks in different sectors. In 2017, I moved to Arab African Investment Holding for three years mainly working with Shimaa El Nemr. She taught me the importance of having a good market sense and how to apply everything we’ve done in the models into decision making.

My entry into research was a brief stint at Renaissance Capital, where I was working with Ahmed Hafez. I then got my position at Arqaam Capital in 2019 and now I cover consumers and healthcare in Egypt, as well as a few F&B names in the GCC. Working in research was very different from asset management. Talking with clients was new to me, especially since I was used to being the client [laughs]. But my previous experience gave me a sense of what I should say — and how. My current boss, Jaap Meijer, taught me a lot about how to value companies and what questions to ask to make sense of everything.

The best part of my job is that I’ve built a brand for myself. I have a good rapport with a lot of clients who come to me whenever anything happens in the sectors I cover. You feel like they trust you and your judgement. I also really enjoy building models and doing the analysis.

The worst part of my job is putting the ideas on paper. I’m good at communicating verbally, but on paper it’s a bit more difficult. However, it’s a big part of my job so I try to add a different perspective and write something that makes clients want to call you.

The lack of travel during covid taught us all that things can be done virtually just as well. I’ve been on several roadshows. I went to London with Renaissance as well as South Africa and the UAE multiple times with Arqaam. When the pandemic rolled in and things moved online, I realized that I don’t have to be there face-to-face to get the job done. Conference calls are often much smoother and they’re less time consuming and costly. You get to spend more time where you are and where your family is and you don’t have to sacrifice time on travel and commutes. I prefer virtual roadshows and I think that face-to-face meetings will decrease even if the whole world reopens and we go back to normal life.

My theory of investment is you shouldn’t just focus on fundamentals. It’s something I learned while working in asset management. A stock should look good fundamentally of course, but technical analysis and market sense are the deciding factors for me. Knowing when to jump in is extremely important. I can’t recommend a stock, no matter how good it is, if it’s up 40% YTD for example. No stock in the world trades on a fair value basis. There has to be a good story, good management, is affordable, and preferably, has a potential catalyst that could drive the price up. You have to be picky in what you choose. Otherwise, diversification is extremely important. You should diversify within each industry and each sector as well.

The most important factors I look at before recommending a stock are a good story and an attractive entry point. In Egypt, we also put a lot of weight on management and stock liquidity. Two stocks can be very similar and the firms do the same thing, but one is liquid and the other isn’t. In that case, I’ll recommend the liquid one.

I don’t think the EGX will close in the green this year. The anticipation of the capital gains tax coming into effect next year might bring it down. People are restless about it in general.

I also don’t think 2022 will be the year of Egypt. The market is very attractive in terms of valuations, price-to-earnings ratios, and multiples, but the problem is the lack of catalysts on the macro front. We’ve got inflation under control and no significant rate cuts are expected in the coming period.

The last great things I watched are Modern Family and Money Heist. However, I’m not a fan of another season for Money Heist. It's a good show but it should just end there.

I’ve mostly been reading parenting books these days since I’m pregnant and due any day now.

In my downtime, I like to play sports. Before my pregnancy I used to like going to the gym or playing kickboxing and padel tennis, but now I mostly walk or swim.

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The EGX30 fell 0.72% at today’s close on turnover of EGP 1.24 bn (16.8% below the 90-day average). Local investors were net sellers. The index is up 3.2% YTD.

In the green: Egypt Kuwait Holding — EGP (+3.5%), Egypt Kuwait Holding — USD (+2.7%) and AMOC (+1.25%).

In the red: Aspire Capital (-9.4%), Raya Holding (-7.7%) and Speed Medical (-6.0%).