Markaz Sector Reports 2014

Transcription

1 Markaz Sector Reports 2014 Egypt Asset Management Political upheaval obscures growth potential Research Highlights: Analysing the state of Egypt Asset Management Industry in terms of market segment, participants, fund performance, regulatory developments and industry challenges.

2 MARKAZ SECTOR RESEARCH Research M.R. Raghu CFA, FRM Head of Research N.C. Karthik Ramesh Manager Research Rajesh Dheenathayalan Research Analyst Support Jenevivu Lasrado Secretary, Research Fatima Priya Office Manager - Administration, Research FPriya@markaz.com Nael Aboul Huda Manager, Media & Communications NAboulhuda@markaz.com Disclaimer This report has been prepared and issued by Kuwait Financial Centre K.P.S.C (Markaz), which is regulated by the Capital Markets Authority and the Central Bank of Kuwait. The report is owned by Markaz and is privileged and proprietary and is subject to copyrights. Sale of any copies of this report is strictly prohibited. This report cannot be quoted without the prior written consent of Markaz.. Any user after obtaining Markaz permission to use this report must clearly mention the source as Markaz. The report is intended to be circulated for general information only and should not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy in any jurisdiction. The information and statistical data herein have been obtained from sources we believe to be reliable but no representation or warranty, expressed or implied, is made that such information and data is accurate or complete, and therefore should not be relied upon as such. Opinions, estimates and projections in this report constitute the current judgment of the author as of the date of this report. They do not necessarily reflect the opinion of Markaz and are subject to change without notice. Markaz has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate, or if research on the subject company is withdrawn. This report may not consider the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors are urged to seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and to understand that statements regarding future prospects may not be realized. Investors should note that income from such securities, if any, may fluctuate and that each security s price or value may rise or fall. Investors should be able and willing to accept a total or partial loss of their investment. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily indicative of future performance. Kuwait Financial Centre K.P.S.C (Markaz) may seek to do business, including investment banking deals, with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. This report may provide the addresses of, or contain hyperlinks to, websites. Except to the extent to which the report refers to website material of Markaz, Markaz has not reviewed the linked site and takes no responsibility for the content contained therein. Such address or hyperlink (including addresses or hyperlinks to Markaz s own website material) is provided solely for your convenience and information and the content of the linked site does not in any way form part of this document. Accessing such website or following such link through this report or Markaz s website shall be at your own risk. For further information, please contact Markaz at P.O. Box 23444, Safat 13095, Kuwait; research@markaz.com ; Tel: ; Fax: Kuwait Financial Centre Markaz 2

3 MARKAZ SECTOR RESEARCH Table of Contents 1. Executive Summary Industry Architecture Market Segments Capital Market Debt Market Alternative Investments Market Participants Pension Funds Insurance Companies Foreign Investor Retail Participation MSCI Index Classification Regulatory Developments Industry Challenges SWOT Analysis Mutual Fund Analysis AuM Break Up Leadership Position Fund Performance Equity Funds Fixed Income Funds Money Market Funds Specialized Funds Managed Assets Appendix Kuwait Financial Centre Markaz 3

4 MARKAZ SECTOR RESEARCH Tables and Charts Tables Charts 3.2 Bond Market Activity in Egypt 2.1 Industry Architecture 3.3 Venture Capital Funds 3.1 Egypt Stock Market Capitalization/GDP 4.1 Prominent Egyptian GDRs 3.2 Stock Turnover in Egypt Exchange 5.1 Current Stance of MSCI 3.3 EGX 30, Sector Weightages 7.1 Average Fund Size in Egypt 3.4 IPO Issues in Egypt 9.1 Assets under Management - Summary 3.5 IPO Amount Raised by Sector, Top Fund Managers 3.6 Egypt Bond Market Issues, Top Five Fund Managers (Equity Conventional) 9.4 Top Five Fund Managers (Equity - Islamic) Top Fund Managers (Conventional Fixed Income) Top Fund Managers (Conventional Money Market) 3.7 Government Bond Market Issues, Corporate Bonds Issued by Sector (USD mn), Corporate Bond Market Issues, Pension Fund Assets as percentage of GDP, Egypt 9.7 AuMs in Specialized Funds 4.2 Insurance Assets as percentage of GDP, Egypt 9.8 Top Fund Managers, Specialized Funds 4.3 Value Traded by Nationality* 9.9 Top 10 Performers, Specialized Funds 7.1 Value Traded in Egypt Stock Exchange (USD bn) 9.10 Estimating the Size of Managed Accounts (USD bn) 9.1 Egypt AuM Breakup 10.1 Consolidated Fund Manager Rankings 9.2 EGX30 Index Returns over the Years 10.2 Egypt Equity Funds - Conventional 9.3 Asset-Weighted Returns (in %) 10.3 Egypt Equity Funds Islamic 9.4 Top Five Conventional Funds 10.4 Egypt Fixed Income Funds 9.5 Top Five Islamic Funds, Egypt Money Market Funds 9.6 Top Five Conventional Fixed Income Funds 10.6 Egypt Specialized Funds - Conventional 9.7 Top Five Conventional Money Market Funds 10.7 Egypt Specialized Funds Islamic 10.8 Egypt Private Equity Funds 10.9 Investment Funds Multiple Matrix IPO Issues in Egypt, Bond Issues in Egypt, 2013 Kuwait Financial Centre Markaz 4

5 1. Executive Summary MARKAZ SECTOR RESEARCH Egypt Asset Management Industry manages USD 9.3billion 1 in assets in about 88 funds as of January, 2013 Money market funds lead the pack with 90% share, followed distantly by equities at 4.5% Egypt Asset Management Industry manages USD 9.3billion 1 in assets in about 88 funds as of January, In terms of products, money market funds lead the pack with 90% share, followed distantly by equities at 4.5%. Remainder of the assets is spread across fixed income and specialized funds. Of the total assets, conventional funds manage USD 9.2bn (c.99%) in assets while Islamic assets are meager. In terms of the number of funds, there are 34 equity funds, 27 money market funds, 19 specialized funds and 8 fixed income funds. AuM/GDP ratio for Egypt stands at 3.5%, implying lack of mutual fund penetration as an investment option. Egypt asset management market is concentrated among the top asset management companies, with the top three asset managers (out of a total of 21 managers) accounting for 76% of the total assets being managed. Beltone Asset Management leads the list of large asset management companies with USD 3.84bn in assets (41.4% market share), followed by Al Ahly fund & Portfolio Management Company with USD 1.85bn in assets (19.9% share) and EFG-Hermes Holding with USD 1.38bn in assets (14.9% share). Egypt stock market witnessed participation from both retail and institutional investors in equal measures. Local nationals dominate the retail segment while foreign institutions (European & US) are active in good numbers apart from the state institutions. Pension fund assets which are poorly diversified and lack liquidity in the current form holds potential to play a pivotal role, if proper reforms are implemented, considering its size in relation to Egyptian GDP. Insurance assets are too small in size to play a substantial role while debt markets remain largely under developed. Acceleration of privatization programme, introduction of various products to facilitate hedging and enhanced price discovery and increased disclosure norms for listed firms would augur well for the asset management industry. 1 Assets under Management (AuM) refer to mutual fund assets. AuM value computed for funds with Egypt as their geographical focus. Kuwait Financial Centre Markaz 5

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7 Advocating Sound MENA Research Our Research Archive Infrastructure Power Egypt(2014) KSA(2013) Kuwait(2012) UAE(2012) Qatar(2012) MENA (Ex- GCC) (2013) Ports KSA(2012) UAE(2012) Qatar(2012) Oman(2012) Kuwait(2014) Aviation UAE(2012) KSA(2012) Water Qatar(2014) Kuwait(2013) KSA(2013) ICT KSA(2012) Kuwait(2013) UAE (2013) Qatar (2013) Roads and Railways KSA(2013) Qatar(2013) GCC Integrated Infrastructure (2013) Economic Kuwait's PPP Law (Dec - 13) Bankruptcy in the GCC (Jan-13) Multiple directorships in KSA(Jan-13) GCC Demographics (July 12) Got a CMA: What Next? (Feb-12) How is the GCC preparing for a AA+ World? (Sept-11) Stress Testing Kuwait Banks (May-11) MENA Unrest (Apr-11) Kuwait Development Plan (Mar-11) The New Regulations on Kuwait Investment Sector (Jun-10) Kuwait Capital Market Law (Mar-10) Diworsification: The GCC Oil Stranglehold (Jan-09) The Vicious Square Monetary Policy options for Kuwait (Feb-08) To Leap or To Lag: Choices before GCC Regulators (Apr-07) Sector KSA Education (2014) KSA Asset Management (2014) Egypt Asset Management (2014) UAE Asset Management (2014) GCC Banking (2014) KSA Healthcare (2014) GCC Investment Banking (2013) GCC Petrochemicals (2013) GCC Education (2013) GCC Women Investors (2013) GCC Media (2013) GCC Retail (2013) FIFA World Cup 2022 (2013) Mena Asset Management (2013) GCC Islamic Finance (2013) GCC Insurance (2013) GCC Residential RE (2013) GCC Media (2013) GCC Contracting (2013) GCC Healthcare (2012) GCC Metals & Mining (2012) Capital Market Mena Asset Management Policy Perspectives (Dec-13) Including GCC in the MSCI EM Index (Oct-12) Alpha Abound (Aug-12) Kuwait Investment Sector (Mar-12) GCC Defensive Bellwether Stocks (Jan- 12) KSE 15 Index (Sept-11) Kuwait Investment Sector (Sept-10) The Golden Portfolio (Sept-10) Persistence in Performance (Jun-10) GCC Banks - Done with Provisions? (Jan-10) Missing the Rally (Jun-09) Shelter in a Storm (Mar-09) This Too Shall Pass (Jan-09) Fishing in Troubled Waters (Dec-08) Policies Towards Involving Kuwaitis in the Private Labor Market (2013) Powering Kuwait into the 21 st Century - Alternatives for Power Generation (2013) Powering Kuwait into the 21 st Century - Adopting a sustainable power strategy (2012) Tools to Strengthen & Support Kuwait s Private Sector (2012) Daily Morning Brief Markaz Kuwait Watch Monthly Fixed Income Update MENA Real Estate Monthly Round Up International Market Update Market Review Quarterly Half yearly GCC Outlook Equity Risk Premium Corporate Earning Annual Policy Periodic Global Outlook Access Our Reports Bloomberg - MRKZ <Go> Thomson Research, Reuters Knowledge Nooz Zawya Investor ISI Emerging markets Capital IQ FactSet Research Connect TheMarkets.com Paid reports ranging from US$ Complimentary reports

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