US Investor: Once You Drink From Nile, You are Destined to Return

Back in 2010, American investor Marshall L. Stocker was charged with enthusiasm towards Egypt's economic outlook.

Stocker, who is the Vice President of Eaton Vance Management and also a macro equity strategist had a plan to acquire and renovate some of Cairo's downtown buildings.

However, the 2011 revolution, which ousted former President Hosni Mubarak resulted into economic stumble amid a political struggle for democracy and freedom.

The US investor decided to flee the country, like many other investors, publishing the biography "Don’t Stand Under a Tree When It Rains," which documents his strain as an investor during that era of non-stability in Egypt.

At the very end of his book, Stocker repeated the Egyptian saying: "Whoever drinks from the Nile will always return to it."

The saying proved wise, and Stocker is once again investing in the "Mother of the World" Egypt. This time, however, he is investing in equities on the Egyptian stock market.

Up until last March, and as the government moves steadily towards strengthening the economy, the Egyptian stock market is one of the world’s best performers this year.

According to Bloomberg, Stocker's company outperformed 90 percent of its rivals over the preceding three months.

Economy during the revolution 

Stocker described the years 2010, 2011, and 2012 in Egypt as the good, the bad, and the ugly, hinting that the economic condition of the country before the revolution was satisfying and during the revolution was poor and following it was devastating.

Under the Mubarak regime, he said, there had been an equitably sustained effort to enhance economic austerity in the country. "I entered the market and set up a direct investment fund to acquire, renovate and resell downtown real estate," he pointed out, noting that this area holds astonishing 19th-century buildings that present Parisian architecture style. However, these long-forgotten structures were subjected to poor budgetary management.

[caption id="attachment_45938" align="aligncenter" width="500"] Cairo's downtown buildings[/caption]

Conclusion

The conclusion Stocker arrived, during the Mubarak era, is that economic liberalization is one of the major key factors leading to success. "Entirely state-owned economies do not operate as vigorous as their liberalized peers," he repeated.

"The reason why I returned to the Egyptian market, especially in securities' trading, is the presence of economic liberalization," he added, pointing out that policies influence investment outcomes.

Presently, as Egypt is credibly implementing such liberal fiscal policies, Foreign Direct Investments (FDI) have been restored.

"Poor economic policy cannot endure endlessly," he added, asserting that an adequate policy is not an alternative but, a constraint.

When an investor identifies the government's recently adjusted credible strategies, he has a positive economic outlook towards the country and initially intends to invest in it.

Positive economies attempt to adopt a good economic policy with the potential for liberalization to increase a country’s level of financial freedom.

"An increase in economic freedom usually takes place in democracies," he concluded, adding that political governance is usually present in an investor's overall risk analysis.