Managing Director of Mubasher Portfolio Management Mohamed Kotb, a subsidiary of Mubasher for Securities, said the company is preparing to launch a group of new portfolios to attract new individual and institution customers. The company aims to develop its customer base, which now includes an Egyptian institution and another Arab one.
The new package includes long-term portfolios of 10 years dedicated to pensioners and health and education purposes, Kotb said. The available investment vehicles for these portfolios include the stock market and fixed income instruments such as deposits, treasury bills, and bonds.
Investors will regain their funds and profit by the end of the investment period, so as to benefit from them in the pension period and use them for education or health purposes.
Kotb believes these kinds of portfolios suit the Egyptian market since they target the youth demographic, who represent 60% of the community. The second type of scheduled portfolios is the portfolio of indexes, which focuses on investing primarily in the stock indexes such EGX-30.
However, there will be a difference between the portfolio and the index in terms of the relative weight of the stocks in each of them. The portfolio will raise the relative weight of the stocks, which seems liable to rise, as well as adding some stocks from outside the index to take advantage of their opportunity to increase.
Kotb said the third type of portfolio is the “Event Portfolio”, which relies on investment in stocks liable to be affected by a fundamental event, thus altering their price.
Fundamental events include the distribution of high value coupon compared to the value of the stock; media reports expecting that the stock will be acquired or merged which affect the financial position of the company and the value of the stock; or implementation of a huge project which would impact positively on the stock price.
He stressed that these portfolios will be supported by research prepared by the company’s research sector.
Intense competition among asset management companies in the Egyptian market pushes new companies in this field to provide new and innovative ideas to attract customers.
According to Kotb, the company is also working to attract portfolios belonging to institutions such as Banque Misr, Banque du Caire, National Postal Authority, and National Social Insurance Authority (NSIA). He expects the company will receive the investment fund management licence from the Egyptian Financial Supervisory Authority (EFSA) within two months, after being granted a preliminary approval.
Mubasher launched direct negotiations with several private insurance funds, some of which are worth EGP 1bn, to form their financial portfolios. Private insurance funds can be established by any association, union, authority, individual relatives, or work colleagues to provide compensation, financial benefits, regular salaries, or pensions to fund members.
There are six types of private insurance funds in Egypt: fellowship funds, savings and investment funds, health insurance funds, supplementary pensions, and investment funds of special nature.
In September 2015, EFSA obliged the private insurance funds to appoint a full-time investment manager or assets management company if the value of the fund exceeds EGP 100m.
Mubasher launched an international asset management company headquartered in Bahrain two months ago to manage the funds of investors in the Middle East and other international markets, Kotb said.
Mubasher-Egypt will cooperate with its counterpart in Bahrain to attract investors, especially since the company uses a trade programme to conduct purchase and selling operations of stocks in 70 markets around the world.