You're watching...
SM Advisory Group CEO Saud Masud on how recent protests have impacted foreign investments in countries such as Egypt and Libya.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
Testers attack US diplomatic compounds in Egypt and Libya as we're just talk in the US ambassador to Libya and three staff were killed.
And one of the -- so where does this leave the region hopes of gaining any kind of real foreign investment joining us now is so must -- his SM advisory group.
CEO -- it's a very tough sell today right when you see the mobs controlling the street to say that this is a region in which you wanna invest how do you do how do you make the sale.
Well I think it's it's a very fair point and I think what you see in terms of the headline risk adds to the volatility -- -- true medium term no doubt.
But despite that I think we gotta look at what the market's factoring in the market is factoring in a revolution not an evolution.
The understand the market understands that Egypt to work in progress and the looking past all believe the growing pains and unfortunately the cost of the revolution is.
Is in time -- in money.
And -- also and you know human -- that investors and businessmen are looking at the situation the mob scene that we just saw and and saying look if if the US embassy.
I can't protect its personnel -- -- why is -- US businessperson going to be protect.
Absolutely and I think -- The first and foremost priority for horses and sufficient to make sure you provide -- environment.
To -- shall containment you've seen this in caucus on you've seen this in Lebanon you see this and other personal war.
Where you have event risk.
But if you can manage it you do -- -- flows coming back in.
But being easier develop I mean this the first before the frontrunners really are of the domestic players and then the -- -- all right and they -- -- -- you know you'll buy low end and I can imagine right now today the market is pretty well right right absolutely I think if you look at from a valuation standpoint.
Despite the run up this year it's up 60% this year but still 20/20 5% when -- say it's up you're talking about an amalgam of the of the Egyptian.
Public companies right when you can you can buy into that within ET FEG.
PT absolutely right and and you you look at that even the the domestic indices they're -- the fifty plus percent grange.
You you wouldn't you really think that you may be the story is trying to corner but really is still down by 25 I don't -- levels well that's the point we should mention while it's up 57%.
In this year it was down 49%.
In 2011 and it has to come up another 20%.
Before will be to -- -- Egypt -- if I'm wrong but they still don't have a parliament right right they still don't have a constitution.
Or.
So it's still very early days the Muslim Brotherhood could take over while I think you you really looking parent.
What the market is is physics physics -- assuming that could go wrong horses that it would would system was the upside.
As of now I think the market assumes this is a real economy this is an investor bull market it has institutional framework brother Muslim brother order -- And if you can build upon that it's very unlike the other North African countries like Libya where you don't have an institutional framework.
We should mention by the way that egyptians all over the Middle East are known as the best dealmakers that there are a lot of that.
A lot of the companies in the Arab emirates for example -- higher not their role capable but they'll hire egyptians to be the managers of their companies I think human capitalism is -- is a real strong pitch from from different standpoint but also what until one other thing.
Egypt is the role model for the Arab world think about it.
Egypt is a very -- well diversified economy it's not just a one trick -- and has no oil also they don't have they don't realize that that is sure it's.
Primarily it's agriculture -- services except industrial manufacturing.
And that's what southern Arabia wants to be 304050 years down the line they need to have the diversity because you can't be.
Tied to the -- in the oil market okay well as you might know the US government today is is deciding whether the funds US funds to places like Egypt will continue based on what happened in Libya.
Of course US funds also going and Libby if those funds dry up.
If the United States says look we can't give money to countries that are playing a part if if even if it's not direct right in the death of US citizens.
What happens what happens to investment in those conducts a view as critical point they're because I think.
There's a reason why the markets went up 60% this here.
And the part of the reason is is the debt -- -- the United States -- about one billion maybe there's more to come.
IMF is putting before point eight billion and pinned in though in the in the market you've got -- -- -- because that all have those stakeholders.
A -- believes it is a stable Middle East is a stable environment broader and you politically it's very critical to the United States.
So US walking away I think is is a direct correlation with the markets pulling back if that if that were to happen.
So there's nothing fundamentally different in each of today which is -- months ago.
The market's only -- because there's US interest uses -- commitment.
If that would -- I would be very surprised the market pulls its gains right so good -- -- is settled -- thank you very much from SM advisory.
