Azimut Egypt Asset Management plans to launch new investment vehicles in the coming period, starting with an Egypt-focused equity fund to be based in Luxembourg.
The company has completed the procedures to establish the fund in October. It will be allocated for investment in publicly-traded Egyptian companies.
Italy’s Azimut Group has signed an agreement with Rasmala Holding at the beginning of the year to acquire 100% of the shares of Rasmala Egypt Asset Management (REAM), which manages EGP 10bn assets in Egypt. In August, Azimut completed its full acquisition of the REAM for EGP 211.3m. Under the deal, the REAM was rebranded to Azimut Egypt Asset Management.
The company focuses on benefiting from the great international experiences of Azimut Group in the countries in which it operates to launch new products in Egypt. Azimut Group is one of the largest asset managers in Italy. Founded in 1989, Azimut manages about €52bn worth assets in 18 countries.
Ahmed Abou El-Saad, Azimut Egypt managing director, said the company manages EGP 8bn worth assets in Egypt, in addition to $70bn assets around the world.
The company expects an increase in the value of its managed assets to reach EGP 10bn by the end of 2020, he added, pointing out that portfolios hold the largest percentage of these assets.
Abou El-Saad revealed that the official launch of the company’s Luxembourg-based fund will be next February. The company allocated $10m (about EGP 160m) to the fund in principle. The fund will focus on raising funds from Egyptian expats and foreigners to invest in the local market, he added.
He explained that the equity fund will focus on addressing Egyptians residing abroad, and will be marketed to individuals in Arab countries and institutions in Europe. It will be Azimut’s first step towards attracting foreign investments into the local market.
In addition, Abou El-Saad said the company has suggested a set of new investment vehicles to the Financial Regulatory Authority (FRA) for approval, refusing to disclose any of them until getting the FRA’s green light.
The new investment vehicles that Azimout aims to launch will focus on foreign investments, by placing them on Azimut Group’s platform and making them available for foreigners to invest in, he said.
Abou El-Saad believes that the new bonds, whether short and long-term, securitised, or corporate bonds, are important assets and provide new products with new investment aspects other than traditional ones. He added that they help investment managers to create more products in the market.
On a different note, he attributed the current low short selling ratio to being a new trading strategy that needs more time and awareness of it, besides the optimistic outlook of the market in the coming period which can affect the whole process.
He described imposing taxes on transactions on the Egyptian Exchange (EGX) as blow of mercy to the market. He stressed that the stock market needs more attention, explaining that although stock prices are cheap, there is no demand from investors to buy because the expected returns are worthless from the investors’ point of view. The number of investors in the stock market also decreased due to the lack of incentives or new offerings.
Abou El-Saad noted that the success of upcoming IPOs depends on the abolition of taxes on transactions on the EGX, and entering untapped sectors.