4th Annual MENA
Investor Conference in Cairo

Liberalisation creates Opportunities

...

Research Takeaways




Investment Vision & Future



  • Our Objective

    Our Objective

    Our objective for investing in the region in 2020 is to formulate a dynamic investment strategy for investors to achieve the highest returns, through focusing on top opportunities that are strongly positioned to benefit from the main themes across the region. The pause of the global monetary easing cycle, which has been the main driver for the outperformance of developed markets during 2019, is expected to weigh positively on EM equities in 2020. We will continue to closely monitor the developments of the trade tensions between the US and China, as a possible resolution would provide support to specific themes within our coverage and reshape our outlook.

  • Our Strategy

    Our Strategy

    Our strategy focuses on offering macro/thematic and sector-specific analyses to pinpoint stocks expected to outperform over our investment horizon. For markets under coverage, Egypt is expected to embark further on its easing cycle in 2020. Lower interest rates, coupled with the anticipated release of excess liquidity by the CBE, would kick-start a domestically growth-driven story, as liquidity would be channeled to private corporates, triggering the long-awaited start of the credit cycle. In Saudi Arabia, Aramco’s IPO on the local market will continue to be the main highlight, as it stimulates off-budget spending and triggers capital rotation within the region. In the UAE, kicking off the Expo 2020 and some corporate actions would drive the performance of selected names in the market. As for Kuwait, the market’s upgrade to EM status, expected before mid-2020, is the key catalyst for Kuwaiti stocks, as the macroeconomic environment remains broadly stable.

  • MENA Economic Drivers

    MENA economic drivers encompass more than cutting interest rates

    The current global easing cycle is stirred by the US and a number of emerging countries, in efforts to stimulate private consumption and investment growth. Notwithstanding global trade tensions and the shrinking likelihood of oil price recovery, the global monetary easing provides a breather to non-oil activities, particularly for GCC countries. Egypt, however, has an independent monetary policy, starting the easing cycle before the Fed, motivated by the phasing out of inflationary policy reforms and healthy inflation prospects. We believe cutting interest rates is not the sole tool to boost economic momentum, and should be complemented by more comprehensive fiscal plans.

  • Liberalisation

    Liberalisation: A key theme across MENA

    We view market liberalisation as a key theme for markets under coverage, as a general deregulation of the government’s role evolves, leaving further room for the private sector. In the GCC, namely Kuwait, Saudi Arabia, and the UAE, the removal of foreign ownership limits (FOL) has been the key trend in 2019, and is expected to continue in 2020. Capital market authorities across the region have hiked FOLs for major sectors. This triggered decent foreign inflows into GCC markets, improving overall liquidity dynamics. In Egypt, a different form of market liberalisation is taking place, as the government is expected to move forward with its stake sale programme in 2020, allowing the private sector to have a bigger role in owning and managing state-owned companies. In addition, the government has liberalised the prices of the majority of fuel products, and accordingly relieving the budget from subsidising such products.

  • Egypt’s Growth

    Egypt’s growth prospects to outpace peers

    We expect 2020 to witness a strong transmission of the CBE’s monetary easing policy, as we expect the CBE to loosen its grip on its excess liquidity absorption policy and demand recovery to materialise. Over the past two years, the real wage differential continued to narrow as inflation decelerates, providing prospects for the restoration of pre-floatation consumption patterns. As inflation continues to decelerate over the coming two years, we expect consumption to play a major role in economic activity once again. We see demand recovery, lower cost of funding, and sufficient release of liquidity, combined, as key for a broad based economic recovery. We expect these dynamics to continue supporting direct and indirect investment activity in Egypt. Additionally, the country’s fiscal and external balances, along with foreseen price stability, provide a shield against short-lived global and domestic headwinds.

  • Aramco IPO

    Aramco IPO: Reshaping the region’s capital flows

    The long awaited Aramco IPO, the largest offering in history and a centrepiece of Saudi’s Vision 2020, comes as a key theme in the region in 2020. In addition to its potential positive impact on the Kingdom’s finances and investment spending, the listing will play a key role in shaping the outlook for both active and passive capital flows in the region. It is also expected to trigger major capital rotation across the MENA region, and, more importantly, within the Saudi market particularly with potential plans to float an additional stake of the company in 2020.

Consistently Focusing on
Long Term Value





Our strategy

Our strategy focuses on offering macro/thematic and sector-specific analyses to pinpoint stocks expected to outperform over our investment horizon. For markets under coverage, Egypt is expected to embark further on its easing cycle in 2020. Lower interest rates, coupled with the anticipated release of excess liquidity by the CBE, would kick-start a domestically growth-driven story, as liquidity would be channeled to private corporates, triggering the long-awaited start of the credit cycle. In Saudi Arabia, Aramco’s IPO on the local market will continue to be the main highlight, as it stimulates off-budget spending and triggers capital rotation within the region. In the UAE, kicking off the Expo 2020 and some corporate actions would drive the performance of selected names in the market. As for Kuwait, the market’s upgrade to EM status, expected before mid-2020, is the key catalyst for Kuwaiti stocks, as the macroeconomic environment remains broadly stable.

Our objective

Our objective for investing in the region in 2020 is to formulate a dynamic investment strategy for investors to achieve the highest returns, through focusing on top opportunities that are strongly positioned to benefit from the main themes across the region. The pause of the global monetary easing cycle, which has been the main driver for the outperformance of developed markets during 2019, is expected to weigh positively on EM equities in 2020. We will continue to closely monitor the developments of the trade tensions between the US and China, as a possible resolution would provide support to specific themes within our coverage and reshape our outlook.

We believe that our markets' correlation with the EM universe will continue unless individual economic stories drive countries to outperform.

Investment Vision & Future




MENA economic drivers encompass more than cutting interest rates

The current global easing cycle is stirred by the US and a number of emerging countries, in efforts to stimulate private consumption and investment growth. Notwithstanding global trade tensions and the shrinking likelihood of oil price recovery, the global monetary easing provides a breather to non-oil activities, particularly for GCC countries. Egypt, however, has an independent monetary policy, starting the easing cycle before the Fed, motivated by the phasing out of inflationary policy reforms and healthy inflation prospects. We believe cutting interest rates is not the sole tool to boost economic momentum, and should be complemented by more comprehensive fiscal plans.

Liberalisation: A key theme across MENA

We view market liberalisation as a key theme for markets under coverage, as a general deregulation of the government’s role evolves, leaving further room for the private sector. In the GCC, namely Kuwait, Saudi Arabia, and the UAE, the removal of foreign ownership limits (FOL) has been the key trend in 2019, and is expected to continue in 2020. Capital market authorities across the region have hiked FOLs for major sectors. This triggered decent foreign inflows into GCC markets, improving overall liquidity dynamics. In Egypt, a different form of market liberalisation is taking place, as the government is expected to move forward with its stake sale programme in 2020, allowing the private sector to have a bigger role in owning and managing state-owned companies. In addition, the government has liberalised the prices of the majority of fuel products, and accordingly relieving the budget from subsidising such products.

Egypt’s growth prospects to outpace peers

We expect 2020 to witness a strong transmission of the CBE’s monetary easing policy, as we expect the CBE to loosen its grip on its excess liquidity absorption policy and demand recovery to materialise. Over the past two years, the real wage differential continued to narrow as inflation decelerates, providing prospects for the restoration of pre-floatation consumption patterns. As inflation continues to decelerate over the coming two years, we expect consumption to play a major role in economic activity once again. We see demand recovery, lower cost of funding, and sufficient release of liquidity, combined, as key for a broad based economic recovery. We expect these dynamics to continue supporting direct and indirect investment activity in Egypt. Additionally, the country’s fiscal and external balances, along with foreseen price stability, provide a shield against short-lived global and domestic headwinds.

Aramco IPO: Reshaping the region’s capital flows

The long awaited Aramco IPO, the largest offering in history and a centrepiece of Saudi’s Vision 2020, comes as a key theme in the region in 2020. In addition to its potential positive impact on the Kingdom’s finances and investment spending, the listing will play a key role in shaping the outlook for both active and passive capital flows in the region. It is also expected to trigger major capital rotation across the MENA region, and, more importantly, within the Saudi market particularly with potential plans to float an additional stake of the company in 2020.