By Mahmoud El Kassas and Shaimaa Turky
“Build your investment now with low prices before reforms in the system and the increase in investments to enter the Egyptian market,” Chairman of First Equity Partners (FEP), Amr El-Maghawry, advised investors looking for new opportunities with low costs.
According to El-Maghawry, geopolitical, structural, bureaucratic and administrative risks are an obstacle for any investor who wants to enter the market now. However, the government’s efforts to reform the system is almost done, which will significantly increase the cost of entering the market on investors.
He stressed the importance of including government plans in the Economic Summit, with a full vision that would give all aims and strategies. El-Maghawry added that he is hopeful the government would be ready to answer questions with transparency regarding the infrastructure and the plans for the energy sector, and whether it will propose energy projects to fill the demand of every region or whether the investor bear all the costs alone.
He also demanded there be a way to balance the job opportunities the projects will offer, and the investment incentives in order to encourage new industries and increase the rate of employment.
El-Maghawry added that the way the Investment Authority and the public authorities were established is based on facilitating an investment climate and not supervision. The investor deals with more than 20 entities on average until the project comes to light, and sometimes the number is up to 40 entities of the 58 entities in Egypt. A statement must be published after the summit, in September at the most, to follow up with the project steps they chose and whether they have a clear vision on the obstacles, according to El-Maghawry.
FEP is one of the companies working in management of regional assets. The company has offices in Bahrain and Egypt, and is owned by Kuwaiti Investors Group, managing assets worth $3bn from Morocco and Iraq. The company has a real estate portfolio in London and two-thirds of its investments are in the industrial sector. Recently, FEP acquired 67% of White House Securities (WHS), a company working in sponsoring small- and medium-sized enterprises, and it is listed in the NILEX.
In 2015, the company aims to return the business of portfolio management to WHS and investments under WHS are expected to reach EGP 2bn by the end of this year, including all direct investment portfolios and the stock exchange investments.
He clarified that WHS will have the money under its management for direct investments in the heavy industry, small-sized and medium-sized industries, and it currently studies several companies working in the medium-sized industries worth EGP 200m to EGP 250m.
FEP also established Injazat Data Systems with capital of EGP 10m last year. The company now also owns shares in two companies working in the food industry,y through increasing its capital, which is at EGP 1.7m.
FEP plans to create a portfolio of four to five companies in the food sector and then serve this sector. It almost signed a contract to own a new company, as well as studies that are being conducted to acquire another two companies. The investment cost was at EGP 2.5 so far and FEP owns shares in most of the two companies.
El-Maghawry added that the company will soon acquire Orix Company, specialised in concrete and building materials in Fujairah in exchange for AED. Previously, FEP acquired a share of 50% of Orix for AED 5m.
