Egypt is positioning itself on Asian investors' radar screens, writes Niveen Wahish from Hong Kong Egypt made its debut in Hong Kong this week, convening its first ever Euromoney Egypt investor conference in the special administrative region of China. For years the Egyptian government has focussed on the West when seeking investment, sending an annual delegation to London, Europe's financial hub. Now it is casting its eyes eastwards, and the road show has reached Hong Kong. Egypt is keen to capitalise on the growing trend among Asian investors to look for investment opportunities beyond their immediate neighbourhood. Business with Asia has been growing in recent years, a point Egyptian Minister of Investment Mahmoud Mohieldin was keen to stress. He told conference attendees that a decade ago trade with the Eastern hemisphere represented 10 per cent of Egypt's total trade balance, whereas today the figure stands at 35 per cent. Investments have grown at a similar rate, with the Far East now providing a third of foreign direct investments (FDIs) into Egypt. It is a success story on which the government is keen to build, and in recent months Egyptian officials have been heading east in ever growing numbers. Events such as the Euromoney Egypt investor conference are a central plank in government policy. Their aim is to increase awareness of Egypt as an investment destination, something that is much needed in the east. Edward Lee, managing director of Cardinalasia Consulting Limited, is typical. He told Al-Ahram Weekly that his knowledge of Egypt is limited to the cultural sphere and to the fact that it is located in the Middle East, a resource rich area. He knows nothing about the economy. Likewise Terence Mahony, chairman of the small investment bank Platinium Advisory International Inc. He has no idea that Egypt is a high growth economy. He bundles it with the rest of the Middle East as a potential hot spot for political turmoil. Such are the misperceptions the government is trying to tackle. "There are Asian institutions with funds to spend that are looking around for stable growth opportunities, which they can find in Egypt, but there is a knowledge gap that must first be filled," says Mark Rorison, director and head of research at Commercial International Capital (CI Capital). The knowledge gap goes both ways. Marwan Elaraby, managing director of Citadel Capital, a leading Egyptian private equity firm, told the Weekly that there were many financing opportunities in Asia of which Egyptian investors were unaware. Tuesday's conference was one attempt to promote greater awareness on the part of both sides. CI Capital's Egypt Day, scheduled to take place in Singapore for the second year in a row today, is another. The event features an overview of the macroeconomic situation in Egypt as well as individual company presentations. "The interest is mutual," says Rorion. "When Singapore's economy shrunk by nine per cent in 2008 they felt the need to find new business areas. That is where interest in the region kicked off." Richard Banks, Euromoney Conferences director for the Middle East, points out that for the last 20 years Asian funds have largely been directed towards building local businesses and promoting. "Today," he says, "Asian governments are encouraging businesses to reach out and invest in other emerging markets." "They do not want to depend solely on exports because they have seen the damage that that dependency can do." Now the huge surpluses of Asian economies are being directed not only towards traditional investments in resources but in other types of project. What investment bankers like Mahony are looking for are economies that have high growth rates in which they can place their clients' money. What Egyptian officials are trying to get across is that Egypt fits the bill. Mohieldin was joined by Minister of Communications and Information Technology Tarek Kamel and the heads of the Egyptian Financial Supervisory Authority, the Stock Market and the General Authority for Investment, to convey the message and promote the attractions of Egypt to Asian investors. Kamel invited investors to benefit from Egypt's success in positioning itself as a global outsourcing hub and to take advantage of the talent pool of young Egyptians. Communications and information technology (CIT) was high on the list of growth sectors highlighted by Mohieldin. He also listed construction, financial services and infrastructure, including energy projects, as investment opportunities. He stresses that the global financial crisis had had little if any impact on Egypt's CIT sector, which has been growing at an average of 14 per cent for the last five years. The financial sector has been growing at between eight and nine per cent and construction at 11-14 per cent. Mohieldin highlighted the ability of the Egyptian economy to grow even during the crisis. He pointed to particular interest in the area of refineries -- Egypt has received five requests to establish refining plants -- and underlined government initiatives to amend existing laws so that grant free zone status can be extended to cover those industries and hence boost investment. "It is not easy. Attracting investment needs enormous effort. This is a difficult year for everybody," he said. Nonetheless, Mohieldin remains hopeful that Egypt will meet its target of $10 billion in FDIs by the end of the year. "The doors are opening," according to Rorison, "to tap much needed investment from in Asia." Samuel Zavatti, CI Capital's representative in Asia, agrees. He recommends that Egypt continues to spend time and effort telling its story to Asia's investor community.
