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Tuesday, 16 November 2021

Meet our analyst of the week: Alpha Capital’s Salma Taha Hussein

OUR ANALYST OF THE WEEK- Salma Taha Hussein, independent board member at Alpha Capital Group and ex-head of research at Concord International Investments (Linkedin).

My name is Salma Taha Hussein and I’ve been working in the field for almost 25 years. I started my career working on the USAID Privatization Project led by Arthur Anderson. The project’s mission was to conduct valuations on all public-sector companies and recommend and guide the government on the most appropriate privatization method — whether through an IPO or selling to a strategic investor. In some cases, the recommendation was to liquidate the company altogether, especially when there were years of losses or the product wasn’t needed anymore.

I then moved to Fleming Commercial International Investment Company where I worked as a senior research analyst on the sell-side. This was during a period that I consider the rise of the EGX — when we saw a lot of large companies listing, such as Ezz Steel and Orascom Construction. The office would often send me to London to talk to foreign investors and understand what they look at when investing in Egypt, and how they choose equities.

I then moved to Concord International Investments where I spent 15 years. This was my shift to buy-side and it was very different. On the sell-side you look at the short-term more often, but buy-side is more long-term, which requires a different vision and approach. For the first few years, I managed a fund in Turkey and was really engrossed in their market. I was also a member of the investment committee at Concord in asset management, where I learned to balance client’s portfolios and create models to maximize return.

Now I’m an independent board member at Alpha Capital Group, and I’m studying for my PhD. I’m doing my PhD in economics and political science at Cairo University, with a focus on governance and institutionalizing digital transformation.

The best part of my job is the exposure and knowledge I receive. I visited a lot of companies in different sectors, both here and abroad, and I got to understand their operations in depth. I still remember the details of cheese manufacturing from when I was working on an F&B company… I even remember the ingredients that were in the feta cheese [laughs]. I’m curious and an inquirer by nature, so the job really satisfies this part of me.

The worst part of my job is the stress. You often don’t know if you’re making the right decision at the right time — plus you’re under tight deadlines. But I believe that I have acquired good stress management skills. Now I break tasks into smaller ones and schedule them out in my agenda. I also make sure that the stress doesn’t affect my team. I allocate tasks in a way where everyone works on what they’re good at, but if there’s flexibility, I try to challenge them so that they’re not bored.

My theory of investment is to create a matrix of factors that I need to consider. I start by looking at the macroeconomic developments and setting aside all the companies that will be impacted by them. Then I look at companies that have good fundamentals and a strong story. I also look at indicators such as market cap, growth, liquidity, and the percentage of shares in freefloat.

The most important factor I look at to assess a company is the management. They have to be accountable and have a clear and achievable vision for the future. I look at their historical performance and their ability to stick to a strategy and targets. The biggest red flag for me is if management backtracks on their decisions overnight.

I believe that governance is the main reason Egyptian stocks have not been performing as well as they should, since a lack of accountability and transparency affects the market and the economy overall.

It’s impossible to determine whether the EGX30 will close in the green this year. I have concerns over the stock market regarding how it doesn’t move in a logical way. When Egypt managed to handle the pandemic well and also achieve positive growth, we still didn’t see the EGX perform as it should. Its movement often has nothing to do with the performance of the company or the country. It’s completely disassociated, and I don’t understand why. That’s actually the question I’m trying to answer in my PhD. I do think more companies should list and there needs to be more liquidity, but there are also a lot of other less vocalized factors that need to be identified and addressed for the EGX to become competitive.

I don’t think 2022 will be the year of Egypt. I forecast that the global wave of inflation will hit Egypt’s economy very soon, causing higher costs, higher prices, and lower gains. There are so many ongoing challenges we’re facing, such as the supply chain crisis and the removal of subsidies, it’s sure to have an impact. We also have a continuing problem of uncertainty in the market that drives away investors, most recently on the issue of the capital gains tax. This uncertainty stems from a larger structural issue we have in the country, where it’s often unclear whether something will be implemented or not. I think 2023 could be the year of Egypt if vaccination rates continue to increase and the country determines a clear track to move forward on.

The last great thing I watched wasn’t on TV — it was actually the Masters Swimming Championship I attended at Gezira Sporting Club. The Masters Swimming Championship is a competition for swimmers between the ages of 25 and 89, and it was so inspiring to watch.

I’ve been swimming and competing in triathlons since 2016. There’s no better feeling than crossing the finish line. In 2018, I joined the Masters Swimming Championship with the Shooting Club. Swimming really helps me handle the stress… once I hit the water everything negative just fades away.

My second biggest hobby is reading. I’m currently reading Saleeb Moussa by Haitham Daboor. My favorite books are The Secret by Rhonda Byrne and The Forty Rules of Love by Elif Shafak. An outstanding Arabic book is Awlad Haretna by Naguib Mahfouz.


Raya Holding’s bottom line soared 688% y-o-y in 3Q2021 to EGP 330 mn, according to the company’s financial statement (pdf). Revenues grew 48% y-o-y to EGP 4.1 bn during the quarter. On a nine-month basis, the company reversed its net loss position to book EGP 481.9 mn in net income, compared to a net loss of EGP 53.7 mn in 9M2020, on a 64% y-o-y increase in 9M2021 revenues to EGP 12.4 bn.

Eastern Company reported a 37% rise in its bottom line in the first quarter of its 2021-2022 fiscal year, with net income coming in at EGP 1.6 bn, the company said in its earnings release (pdf). The tobacco monopoly saw revenues increase 11% y-o-y to EGP 17.5 bn during the quarter.

The company also announced coupon payments worth a combined EGP 1.6 per share for its FY2021 returns, according to an EGX disclosure (pdf). The first coupon payout of EGP 1 per share will take place 1 December, 2021 and the second — worth EGP 0.6 per share — will be paid on 15 February, 2022. Total dividend payments from the company’s coupons amount to some EGP 3.6 bn.

Arabian Cement returned to the black in in 3Q2021, reporting EGP 67.2k in net income after making a EGP 34.1 mn loss in the same period last year, according to the company’s financials (pdf). Revenues during the July-September period rose 13% to EGP 677.9 mn.


The EGX30 fell 0.7% at today’s close on turnover of EGP 939 mn (36.4% below the 90-day average). Foreign investors were net sellers. The index is up 5.2% YTD.

In the green: Orascom Development Egypt (+1.9%), TMG Holding (+1.4%) and Oriental Weavers (+0.8%).

In the red: Pioneers Properties (-7.2%), Aspire Capital (-6.9%) and Egyptian Resorts Company (-6.8%).

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

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