How Egypt stands complimentary to Pakistan
“Pakistan (PAK) and Egypt (EGPT) are in a complimentary relationship right now. Pakistan is now leaving the recovery phase and entering its expansion phase, while Egypt is just entering its recovery phase. Egypt, for its part, is arguably 4-5 years behind Pakistan in its recovery,” Mattias Martinsson, Chief Investment Officer of the frontier market (FRN) (FM) specialist, Tundra Fonder, told Frontera in a recent conversation.
So, for Tundra Fonder, this African (EZA) (AFK) (GAF) nation offers good long-term [4-5 year] value.
Where to invest in Egypt?
For a country in its early recovery phase, it usually takes a considerable amount of time to deliver returns to investors. Egypt currently faces limited demand from foreign funds due to the repercussions of the currency devaluation. However, “the good thing about a country being in the early recovery phase (such as Egypt is in now) is that typical industries such as materials tend to be very cheap, and for good reason,” explained Martinsson. “And the best time to buy those companies is when the sector is in trouble.”
Under this background, Tundra Fonder is invested in Suez Cement (EGX: SUCE), which is the largest listed cement factory in the country. Tundra Fonder invested at an EV/tonne installed capacity of around $15, which is around 1/8th or 1/10th of what you would pay for the same company in Pakistan.
Tundra Fonder is also invested in Eipico from the pharmaceutical industry, Juhayna and Obour Land from the consumer segment, and Elswedy, an engineering company. The firm also maintains GB Auto in its portfolio, which is an auto assembler in Egypt, Martinsson told Frontera.
