Egypt's AMOC to gain as crude edges higher

A rally in the price of crude is expected to lift shares in Alexandria Mineral Oils Company (AMOC) and boost its profit for the year ahead.

"The increase in crude oil prices boosted the allure of AMOC, particularly after the sell-off during December," said George Beshara, an industrials analyst at Pharos Holding in Cairo.

Shares in the company, which produces refined petroleum products, have fallen 6.3 per cent in the past month. But analysts expect an upturn in fortunes in line with rising crude prices.

AMOC rose 2.3 per cent to 44.9 pounds on the Egyptian Exchange yesterday.

Oil has reached its highest point in 26 months, pushing to US$91.38 a barrel on Friday. It was the highest year-end price since 2007 as the dollar declined against the euro and boosted commodities appeal as an alternative investment.

Mr Beshara added that if oil prices remained stable at current levels, the stock would "likely surprise" investors.

The company's main business is refining heavier crude into lighter products with higher commercial value. Production takes place at two facilities, one producing fuels and the other mineral oils, which are less commercially popular.

Total output at the facilities reached 1.86 million tonnes in the company's last fiscal year, 90 per cent of which was produced by the fuels unit.

Mr Beshara has increased his position in AMOC but has not disclosed a target price.

Despite it being a relative small-cap on the Egyptian Exchange, the fundamentals of the company are already looking strong for the year, as oil is widely forecast to reach US$100 a barrel.

Mr Beshara said he expected the company's results for this year to repeat the success of the last peak in oil prices in 2007 and 2008.

Three years ago, AMOC posted record net profit of 917.9 million Egyptian pounds for the full year 2007-2008 and paid record cash dividends of 8.5 pounds per share.

AMOC buys its raw materials from the Egyptian General Petroleum Corporation (EGPC) for the production of higher grades of oil and sells the refined product back to EGPC at international prices.

fhalime@thenational.ae

UAE tour of Zimbabwe

All matches in Bulawayo
Friday, Sept 26 – UAE won by 36 runs
Sunday, Sept 28 – Second ODI
Tuesday, Sept 30 – Third ODI
Thursday, Oct 2 – Fourth ODI
Sunday, Oct 5 – First T20I
Monday, Oct 6 – Second T20I

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Who's who in Yemen conflict

Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government

Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council

Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south

Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory

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Practitioners of mindful eating recommend the following books to get you started:

Savor: Mindful Eating, Mindful Life by Thich Nhat Hanh and Dr Lilian Cheung

How to Eat by Thich Nhat Hanh

The Mindful Diet by Dr Ruth Wolever

Mindful Eating by Dr Jan Bays

How to Raise a Mindful Eaterby Maryann Jacobsen

The more serious side of specialty coffee

While the taste of beans and freshness of roast is paramount to the specialty coffee scene, so is sustainability and workers’ rights.

The bulk of genuine specialty coffee companies aim to improve on these elements in every stage of production via direct relationships with farmers. For instance, Mokha 1450 on Al Wasl Road strives to work predominantly with women-owned and -operated coffee organisations, including female farmers in the Sabree mountains of Yemen.

Because, as the boutique’s owner, Garfield Kerr, points out: “women represent over 90 per cent of the coffee value chain, but are woefully underrepresented in less than 10 per cent of ownership and management throughout the global coffee industry.”

One of the UAE’s largest suppliers of green (meaning not-yet-roasted) beans, Raw Coffee, is a founding member of the Partnership of Gender Equity, which aims to empower female coffee farmers and harvesters.

Also, globally, many companies have found the perfect way to recycle old coffee grounds: they create the perfect fertile soil in which to grow mushrooms.