INVESTMENT PLANNING AND MANAGEMENT SWISS EGYPTIAN PORTFOLIO MANAGEMENT Co. A joint venture of CREDIT SUISSE and CONCORD Arab Public Relations Society Conference, Cairo – 14 October 2002 ince Abbas Hilmi, Chairman
Jun 24, 2015
2. CONTENTS
3. WEALTH MANAGEMENT 4.
WEALTH MANAGEMENT 5. GROWTH AND EROSION OF FAMILY CAPITAL WITHOUT EFFECTIVE PLANNING AND SOUND INVESTMENTS 6. INVESTMENT PLANNING 7.
8. POWER OF COMPOUNDING Investor B10 10 $4,000 Year-End 1989-1999 $40,000 $133,600 Hypothetical Investment in Stocks Investor A10 20 $2,000 Year-End 1979-1999 Years Contributing: Holding Period Annual Amount Contributed: Total Amount Invested Compounded Value atYear-End 1999 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $20,000 $295,400 SOURCE : IBBOTSON ASSOCIATES 9. THE CAPITAL MARKETS 10. WHY INVEST IN STOCKS?
11. OVER SHORT PERIODSSTOCKS CAN BE VOLATILE MONTHLY RETURNS STANDARD AND POORS 500 INDEXDATA SOURCE : IBBOTSON ASSOCIATES 12. ROLLING ANNUAL RETURNS 1926 - 1992 STANDARD AND POORS 500 INDEXDATA SOURCE : IBBOTSON ASSOCIATES 13. ROLLING 5 YEAR RETURNS 1926-1992 STANDARD AND POORS 500 INDEXDATA SOURCE : IBBOTSON ASSOCIATES 14. ROLLING 15 YEAR RETURNS 1926-1992 STANDARD AND POORS 500 INDEXDATA SOURCE : IBBOTSON ASSOCIATES 15. RISK OF STOCK MARKET LOSS OVER TIME 1926-1999 SOURCE : IBBOTSON ASSOCIATES Periods with Gain Periods with Loss 100% 60 Fifteen-Year Periods 90% 10% 70 Five-Year Periods 73% 27% 74 One-Year Periods 16. WHILE TREASURY BILLS-APPEAR BENIGN 17. INFLATION RISK: THE IMPACT ON WEALTH 1979-1999 Hypothetical value of $1 invested at year-end 1979 Assumes reinvestment of income and no transaction costs or taxes 17.9% 10.7% $27 $7.62 Average Return Ending Wealth $1 $10 $100 1979 Stocks Bonds 1983 1987 1991 1995 1999 SOURCE : IBBOTSON ASSOCIATES Inflation-Adjusted Stocks Inflation-Adjusted Bonds 13.3% 6.4% $12 $3.47 18. WHY INVEST IN FIXED INCOME?
19. BONDS PRODUCE GREATER INCOME 1970-1999 Based on annual data over the period 1970-1999 Bonds 85% 6% 9% Stocks 2% 73% 25% Capital Appreciation Income Reinvestment of Income SOURCE : IBBOTSON ASSOCIATES 20. EMERGING MARKETS : GENERAL INDICATORS 21. Source : Salomon Smith BarneyVALUATION: PRICE-TO-EARNINGS RATIO (TRAILING) The average trailing P/E in the emerging markets in August 2002 was16 x GOOD 22. Source : Salomon Smith BarneyVALUATION: PRICE-TO-EARNINGS (2002 FORECASTS) The emerging markets average forecast P/E ratio rose in August 2002 to 12X GOOD 23. Source : Salomon Smith BarneyVALUATION: EARNINGS YIELD GAP Israel Brazil Venezuela Turkey Argentina The average earnings yield gap in the emerging markets is 3.4% in August 2002 GOOD 24. Source : Salomon Smith BarneyRISK: REAL FX RATE VALUATION GOOD Argentina Brazil South Africa Venezuela Colombia Egypt Philippines Chile Hong Kong Thailand Pakistan Average Singapore Taiwan Israel China Turkey Malaysia Peru 25. Source : Salomon Smith BarneyRISK: 18-MONTH BETA The average beta in the emerging markets remained unchanged during August 2002 at1.0 GOOD 26. THE INVESTMENT CASE FOR EGYPT 27. Stock market prices Corporate results Macro data Balance of payment THE INVESTMENT CASE FOR EGYPT 28.
FUNDAMENTAL REFORMS 29.
PRIVATISATION 30. Nominal GDP (at current market prices)FY 1986 - 2002* Source: International Financial Statistics Yearbook 2001. Ministry of Economy, Monthly Economic Digest, May2002 & Sept. 2002. Quarterly Economic Digest April June 2000, CBE Monthly Report August 2002. *2001/02 figure is projected by the Ministry of Economy. Average Annual Inflation 1987 - 2002* STRONG ECONOMIC FUNDAMENTALS 31. Budget Deficit as % of GDP 1991 2002* Source : Ministry of Economy, Quarterly Economic Digest, April June 2000, Monthly Economic Digest February 2002 & September 2002 CBE Monthly Report August 2002. *2001/02 figure is projected by the Ministry of Economy. Egypts Foreign Debt as % of GDP 1992 2002 STRONG ECONOMIC FUNDAMENTALS -CONTINUED 32. STRONG ECONOMIC FUNDAMENTALS -CONTINUED Current Account as % of GDP / Balance of Payments as % of GDP1994 2002* Source: Ministry of Economy, Monthly Economic Digest, August 2001 & September 2002. *2001/02 figure is projected by the Ministry of Economy. 33. STRONG ECONOMIC FUNDAMENTALS -CONTINUED Foreign Reserves in US$ million1992 - 2002 Source: Ministry of Economy, Quarterly Economic Digest, March June 2002. Ministry of Economy, Monthly Economic Digest, September 2002 Media releases US $against Egyptian Pound 1992 January 2002 34.
35. MERGERS AND ACQUISITIONS Source: Financial Securities, Cairo & Alexandria Stock Exchanges, September 2002 Monthly Bulletin. 36. EARNINGS AND PROFITS 37. FUNDS RESULTS
38. STOCK MARKET PERFORMANC E 1JANUARY 1996 TO30SEPTEMBER 2002 S&P IFC GLOBAL INDEX - EGYPT 39. MARKET UPDATE
40. MARKET UPDATE-CONTINUED
41. MARKET UPDATE-CONTINUED
42. MARKET UPDATE-CONTINUED
43.
CONCLUSION