By Mahmoud Hammad
Re-establishing a ministry for public business sector is a positive step that paves the way towards boosting their recovery
Chairman of Eagle Advisors Co. Yasser Emara said that his company seeks forging an alliance with major investment banks and companies to establish investment bank that’s job is to list and offer companies in Egyptian stock markets (EGX).
In an interview with MEO, Emara said that Eagle Advisors will offer 2 companies in Nile Bourse, during the 2nd half of this year. These companies are Express for Integrated Solutions (XPIN) -with an EGP 2.5m capital- and New Castle for Investment Sports (NCIS) -with an EGP 4.3m capital.
MEO interviewed Yasser Emara to discuss his viewpoints over the latest ministerial reshuffle and the re-establishment of the public business sector ministry, Eagle Advisors Co. and latest CBE’s decision to devalue the pound.
What are Eagle Advisors Co.’s latest updates?
We seek to forge an alliance with specialized entities to establish investment banks to list and offer companies in the Egyptian stock market (EGX). For the companies that wish to be listed in EGX or Nile Bourse need to have a public offering managing department, an underwriting coverer, independent financial consultant to set its fair value, a legal consultant, and an auditor –all must be registered at the Egyptian Financial Supervisory Authority. Add to those accredited sponsor, when listing at Nile Bourse.
Eagle Advisors has 2 licenses, namely a financial consultant and an accredited sponsor.
We have already established an alliance with Al-Shareef Office -owned by Former Stock Chairman Dr Attef Al-Shareef- to be a legal consultant. Yet, we are still negotiating with major investment banks and companies to conclude such an agreement.
Would any company under your sponsorship be offered in Nile Bourse?
Yes, Eagle Advisors will offer 2 companies in Nile Bourse, during the 2nd half of this year. These companies are Express for Integrated Solutions (XPIN) – with an EGP 2.5mn capital- and New Castle for Investment Sports (NCIS) -with an EGP 4.3mn capital. 20 per cent of their shares will be offered as well.
Are you negotiating with other companies to list them in stock market?
We are definitely working on that. Yet, there is a state of anticipation and cautiousness toward the financial market’s shape and level and how it will accept new public offerings. Eagle Advisors had submitted offers to several banks, including Banque Misr and Export Development Bank, to assess their subsidiaries and associates’ investment elements -listed in the banks’ financial statements- that are carried out under sophisticated regulations by Central Bank of Egypt (CBE), followed by other national banks.
What are your projections for the merging and acquisition activities?
I think the merging and acquisition market will be highly active in the upcoming period, and consequently stock markets’ trading and listing -especially after re-establishing the public business sector ministry.
What do you think this means?
It means bringing back privatization, but without the past negative features. Privatization in itself is neither an accusation nor a negative thing, but it was carried out in a wrong way. He pointed out that when previous governments privatized some companies, they sold their stakes through public offerings. But, what will be done now is that public businesses’ capitals will be increased by joining new investors, for the company’s fair value, according to new privatization programmes.
Over the past years, the public business sector has represented a thorny area for the state, seeing it comprises 120 companies, with only a slight number of them posting profits. Whereas, the rest of them records losses, on top of them come strategic industries –like those of iron and steel.
Do you think the re-establishment of the Public Business Ministry will save its companies?
Yes, this step will have positive outcomes on public holding companies and their subsidiaries, in terms of management’s structure- especially that privatization will now be carried out by increasing capital. Moreover, assessing this sector’s companies according to their market value will boost their recovery.
Do you think this decision is long overdue?
Establishing a ministry for public businesses comes for a purpose, once it is fulfilled, it is no longer needed. Thus, businesses under this ministry can go back to following investment ministry. When public businesses ministry was first found, it was to embark on privatization and economic reforms. Bringing it back now is for the same reason, but this time, with more keenness on avoiding previous errors and ensuring that all citizens feel this sector’s development.
How do you see the Economic Group following the latest ministerial reshuffle?
The key to government›s success and consequent citizens› happiness lies in the hands of minister of finance first. Followed by investment minister, who is responsible for attracting foreign investments to sustain the country›s foreign currency reserves. The Economic Group›s key role is to coordinate between the government›s financial policies and CBE›s monetary policies to achieve the best interest of Egyptian citizens.
The group should work on making public companies self-reliant when it comes to expenses and revenues, instead of depending on the state. It would then focus on decreasing the state›s public debt and budget deficit.
How do you interpret the CBE’s latest decision to devalue the pound?
All countries have devalued their currencies, due to the world economic recession. Some- like Brazil, Argentina, Russia and Turkey- have even devalued them by 30-40 per cent. Thus, devaluing the pound was a necessary move and was inevitably to be followed by an increase in interest rates. This is not an invention. What we should do is look beyond this decision. I believe that banks› issuing foreign currency bonds and treasury bills will be one of the most significant dollar sources in Egypt, at least in the time being.