Abu Dhabi’s Invest AD Shifts Funds to Egypt as Stability Returns

Abu Dhabi asset manager Invest AD, part of Abu Dhabi Investment Council, said it’s boosting investments in Egypt on expectation that the country’s renewed political stability and economic reform will help drive growth.

The North African country now accounts for 35 percent of Invest AD’s $50 million Africa equity fund, up from 10 to 15 percent last year, portfolio manager Sherif Salem said in an interview. Nigeria is 5 percent, down from 30 to 35 percent.

“The market is already factoring in quite a positive outcome,” Salem said Sunday in Abu Dhabi. “The trigger was political stability. From an economic standpoint, it’s been reassuring in the past six to eight months, the implementation of economic policies and investments that have been promised.”

Egyptian authorities have taken steps to attract investors including reducing energy subsidies, lowering income tax and devaluing the pound. The country this month secured billions of dollars in investment commitments at a conference billed by the government as a milestone in efforts to revive the economy.

While Egypt is recovering, Nigeria is struggling with Brent crude prices having halved since June. Electoral officials have also delayed a presidential poll set for Feb. 14 by six weeks after the government said army couldn’t guarantee voters’ safety in the northeast, where a six-year insurgency by Islamist group Boko Haram has killed thousands.

Gulf states’ backing of the Egyptian government played an important role in improving sentiment, Salem said. Saudi Arabia, the United Arab Emirates, Kuwait and Oman pledged more than $12 billion, half of it as deposits in the central bank.

Salem said he expected a return of 10 to 15 percent from the Egyptian market this year. “A lot of things can happen but what I can see is a positive outlook,” he said.

Invest AD manages fixed income and equity funds in the Middle East and Africa.

Before it's here, it's on the Bloomberg Terminal.