Thursday, Dec 14, 2017
Finance | Africa | Egypt

Concord International Investments

On the right track, again


1 year ago

Mr. Mohamed S. Younes, Chairman of Concord International Investments
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Mr. Mohamed S. Younes

Chairman of Concord International Investments

After passing through difficult times, and still undergoing major challenges, Egypt is rebuilding its economy once more to be back on the success track. Cahirman Mohamed Younes reflects with us on the Egyptian potential for recovery and how Concord will keep pushing forward, as it always did.

The Egyptian people always seem to speak with optimism, pushing the country back on its feet regardless hard obstacles and periods of crisis. So, what is it in the Egyptian identity that makes its people get all this resilience?

We as Egyptians were invaded by everyone, the Romans, the Greeks, the Arabs, the Persians, everyone. We got to survive that for seven thousand years. So it’s natural that after all of this the nation has developed a survivor culture. We’re the only country that has nowadays almost the same borders we used to have 5.000 years ago. That’s got to tell you something.

In line with this spirit, indeed needed right now, given the situation that the country is going through, you’ve mentioned that the fundamentals of the economy are there. So what feeds your optimism in the midst of this entire situation?

Facts of life. We’re a country with ninety million people; and this is growing at a fantastic rate. 27% of the population is under the age of thirty, such a tremendous resource. So embracing this the right way and taking advantage it’s the greater challenge: how to make useful this phenomenal resource we have, as young generations are expected to push things forward.

If we go back to economics, we have to look at Egypt as the most diversified economy in the region. How do you see the role of capital markets in the sophistication and diversification of the economy?

It’s very important. We have stock certificates from 1850, 1860, Egyptian companies used to list in Cairo, London, and Brussels to get more capital. That’s our main reference in the past. We have a sophisticated system, we have institutions. But I believe since we passed through difficult periods that affected tremendously our capital markets, it’s all about rebuilding and restarting our success path. The institutions and the framework are there. I got reasons to think we could achieve all of our potential because we’ve already had it in our history.

The central bank of Egypt established that in 2016, they expect the international reserves to reach 25 billion. What initiatives should be implemented in order to generate or to promote healthy investment environment in Egypt?

Monetary policy. I believe its necessary to free up foreign exchange and let off the market with flexible currency, it’s about management. Opening more the economy and allowing free movement of capitals and funds is key. This will put us in the right path towards accomplishing the government plans in this matter.

Having half your firm in the US, you could see the influence of American investment. As they say, money talks. Do you think people are going to put their money here to influence?

The fact is, they are. In the last year Concord generated two billion dollars by selling Amon and Biscomisr. Both sold to US investors. It’s a matter of timing, investors are prepared to come to the market.

After the crash of the flight MS804, the Egyptian stock exchange lost four billion Egyptian pounds. How weak or vulnerable is the Egyptian economy to public perception and how to fix this?

You have to work on perceptions because we’re losing battles in this field; it’s too stacked up against us. Fundamentally, we need to provide confidence abroad at all cost that things are on the right track. It’s a delicate issue since country perception in the West can change dramatically from one moment to another. It’s a challenge but we ought to solve it it in order to keep attracting investments

In 2015 and continuing 2016, you won Best Asset Manager from CFI and obviously this as a headline in the context of the sale of Amon to Valeant and Biscomisr to Kellogg’s. What was the key to achieve all of this?

Managing those companies properly; we have business relationships with companies that were state-owned for a long time, but had been privatized almost completely. So we were able to bring in management, we changed the whole management structure of the company, we hired young people, we implemented new systems, it was a ten-year effort. You have to work hard to create value. In the end you develop your own model and that’s what gets global players like Kellogg’s attention. This is how we do at Concord.  So you’re buying assets, not speculation, we don’t buy land and expect to find oil. That’s like winning the lottery more or less. You have to be able to produce something that is worthy and sustainable. Though, convincing everyone that your asset has potential and its worthy for acquisition, that is I think the toughest part.

Her Excellency the Minister of Investment was very keen that indirect investment would be at the core of her investment plan as the IPO era is to become the new thing. How is Concord positioning itself to take advantage of this situation?

We will keep buying the companies and offering them, that’s what we do. We are interested in managing money. We want to be the best at what we do which is investment management and private change and we want to do this by being completely focused. So we’re not jumping and venturing in buying banks or brokers, we’re not interested in the headlines. I believe the best we can get though is betting in human capital. Concord hires the best people, motivates young people. People who have vision, energy and are well prepared to face the new challenges presented by the markets.

54 American companies expressed interest in investing in Egypt and several companies are coming as part of the next US business mission. If I was part of that mission and would be looking for financial advice from a local perspective, why would I pick Concord to do business with?

We provide the local knowhow and the people which, I already mentioned, are a key asset. Our track record and reputation is very important as well, in terms of integrity, in terms of professionalism. That’s what you seek in a partner for business, that’s what we put on the table. As the big, diverse and sophisticated market Egypt is, we represent the number one on market research. Plus, we have the advantage of being a company that operates both in New York and Cairo. In Egypt we’ve been operating basically since the market opened up in 1992. We pioneered and have been a part of the system in all its stages. It’s about providing our expertise. Strategically we know better how to invest and do business effectively here. That’s why Concord combines the Know-how of Wall Street with the local knowledge of Egypt.

Finally, you said that Concord chases after growth rates. Where are you looking now? Where is the direction that you want to invest next?

Our focus is on the impact of the sizable increase in population. This will benefit the food industry, pharmaceuticals, housing and education.


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