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Tuesday, 20 September 2022

EFG’s outlook is “extremely bullish” — especially in the GCC

EFG Hermes Group CEO Karim Awad welcomed more than 655 global investors as well as CEOs, C-suite execs and IR folks from more than 200 companies spanning from Nigeria to Vietnam and beyond, on the second day of the EFG Hermes One on One investor conference in Dubai. “Nothing beats the warmth of face-to-face human interaction,” Karim said. Everyone in the finance industry — issuer, investor and banker alike — has suffered through a lifetime’s worth of virtual meetings since covid-19 kicked off in March 2020.

Awad is “extremely bullish” on the countries in which EFG does business — and singled out the Gulf Cooperation Council countries. Business growth in the GCC is being driven not just by high oil prices, but by “strong and pragmatic leadership” that is diversifying economies and transforming stock exchanges with globally compelling transactions, he said.

EFG Hermes has changed massively since we all last gathered in Dubai in March 2019, Karim noted, pointing to the group’s acquisition of aiBANK in Egypt, valU growing to the point that it attracted investment from Amazon, and the investment bank’s involvement in IPOs including Dubai Electricity and Water Authority (DEWA), ADNOC Drilling, Borouge, Ali AlGhanim & Sons, and ACWA Power, among others.

KEY TAKEAWAYS from EFG Hermes Research’s “The Consensus 2023,” the only live research poll we know of in frontier emerging markets. Participants had 10 seconds to vote live on each of 10 questions. The results:

  • 69% of respondents see the US Federal Reserve raising rates another 1.5 percentage points or more during the current cycle.
  • 46% of respondents believe Brent crude will be at an average of about USD 80 / bbl in 2023 — and 41% see it averaging USD 100.

^^ Why this matters: Interest rates and oil are central themes for the region, EFG Hermes Research said in a note to clients yesterday after the poll.

  • The markets likely to give the best return in 2023 (in USD terms): KSA (39%), followed by Egypt (21%) and the UAE (17%).
  • Investors were evenly split on what asset class they’d choose to buy and hold for three years: 29% tap emerging markets equity ETFs, while the same number would hold an S&P 500 equity ETF. In third place: Gold, at 19%, with US 10-year bonds (13%) and a basket of cryptocurrencies (11%) bringing up the rear.
  • The best performing US stock in 2023? That would be Amazon, which was tipped by 27% of respondents, narrowly edging out JP Morgan (24%), Tesla, Exxon, and Walmart.
  • The biggest source of risk for your business over the next year: A dead heat between finding good people (23%) and rising interest rates (24%).

Tap or click here to see the full poll results (pdf)

ALSO YESTERDAY- DFM boss Helal Saeed Almarri did an on-stage interview with EFG Hermes Research Head of Strategy Simon Kitchen. Almarri wears many hats, including that of director general of Dubai’s Department of Economy and Tourism. He’s smart, well-spoken and absolutely worth hearing from on the importance to the private sector of clear, transparent and dependable regulatory frameworks, among other issues.

The One on One continues through Thursday. We’ll be bringing you daily coverage in EnterpriseAM.

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.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.