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| Introduction |
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Global Trade Matters S.A.E. is a unique company; the region’s first profit based Private Sector Think Tank for Economic Policy and Reform with aspirations of becoming a world leader in content development, conferences, policy papers, publications and news print.
Our clients (delegates) are intellectual professionals representing a variety of different sectors and interests from both the government and private sector. Our clients seek new venues to explore different and new opportunities which can improve upon their business and promote their different products and services.
Our sponsors are large corporate organizations locally and internationally with names such as Intesa Sanpaolo, Credit Suisse, Goldman Sachs, Moody’s, CI Capital, and Citadel Capital have been supporters of the GTM initiative.
Global Trade Matters is the perfect venue for business networking, meeting new partners and forging new business ties domestically and internationally. The Global Trade Matters brand equity is well established and has a strong history, holding over 50 different conferences and meetings in the past five years, producing the Global Trade and Investment Report (official publication of GTM) and the Al Borsagia Newspaper (bilingual weekly newspaper) with a distribution of 15,000 copies a week. (In Egypt)
GTM plans to develop 22 conferences and meetings in 2010, publish four magazines and produce over 700,000 copies of Al Borsagia newspaper by the end of the year. GTM is also expected to attract 1592 delegates and 122 speakers during 2010.
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Anthony Espina - President of the Hong Kong Securities Exchange - Speech GTM/EGX Awards 2010 23/3/2010
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The following is the text of my Keynote Speech at the
Global Trade Matters/Egyptian Exchange 5th Annual Awards
to Outstanding Companies in Egypt
Opening Remarks
First of all I would like to thank Ashraf Naguib, Managing
Director of GTM, for inviting me to participate at this
event.
Address the Key Guests
Mr. Karim Helal, Chairman of the GTM/EGX Strategic
Advisory Board
Members of the GTM/EGX Strategic Advisory Board
Distinguished Guests
I bring you greetings from China, the faraway land with a
civilization that matches your own in antiquity
It is a great honor to be invited to participate in this
very prestigious event to celebrate the achievements of
Egypt’s top companies, and the men and women who have made
them successful
First of all, I would like to offer my congratulations to
the awardees. Not only have you survived the The Great
Recession of 2007 ( I will not use the “D” word) but you
have thrived and prospered in the most difficult financial
and economic conditions since the 1930’s. You have every
right to be proud of yourselves. Give each other a pat on
the back. You are the Best of the Best!
But precisely because you are The Best, you must be asking
yourselves “What’s Next? What am I going to do next year?
Has the world economy recovered? Or, will we be like Japan
and lose a decade, or two?”
The HKG Story: China’s Proxy
Ashraf asked me to share with you my thoughts, concerns
and optimism for 2010.
Before I go on, I have a confession to make. I am not an
economist nor am I a banker. I am a bean counter (an
accountant) turned stockbroker. I don’t have any grand
theories of economic boom and busts, nor do I have a
prescription for “saving the world’s economy”.
All of you present today, run huge corporations with
thousands of employees and revenues in the billions.. The
fact that you are sitting here tonight is proof enough of
your success. So I am not going to try to tell you how to
run your business
However, in the 40 years since I started working in 1969,
I have observed at first hand a few economic cycles and I
have been fortunate enough to have participated in the
miracle that turned China from a backward agricultural
economy on the verge of starvation into the economic
powerhouse that it is today.
I am sure you are all familiar with China’s economic
statistics and I will not bore you with the details.
However, I would like to talk a little bit about China’s
proxy economy, HKG.
When I first returned to HKG in 1971, the Hang Seng Index
had just closed the previous year at 211. The average
daily turnover was USD2.6 million and the turnover for the
whole of 1970 was USD778.4 million.
By the end of 2009, the HSI closed at 21,872. The average
daily turnover was USD7.9 billion and the turnover for the
year was USD1,979.4 billion. Per capita GDP was USD30,088.
During the past 4 decades, HKG benefitted by being the
proxy for China. Foreign companies trading with China did
so through HKG, and Chinese companies used HKG as a window
on the world.
When China opened it’s doors, Chinese companies used HKG
as the platform of choice in raising capital and much
needed foreign exchange. Since the first Chinese company
(Tsingtao Brewery) was listed in HKG in 1993, over 300
Chinese companies have have followed raising some USD280
billion in IPO and subsequent fund raising. Chinese
companies now account for over 30% of the listed
companies, over 60% of the market capitalisation, and over
70% of our daily turnover.
HKG benefitted by being on the doorstep of China but that
is not the secret to our success. Many cities have had
similar opportunities but by not evolving as the times
changed, fell by the wayside. A prime example is Kashgar
on the Old Silk Road. For many years, it was the point of
entry in China and prospered for many years by being the
conduit of goods between China and the rest of the world.
Look at it now.
By the way, I am sure you have heard about China’s USD2.3
trillion foreign exchange reserves. Over 10% of that came
through the HKG capital markets.
Yes, HKG benefited by being on the doorstep of China but
the key is that we changed from being a trade entreport to
a financial intermediary and we contributed to the
country’s development.
Egypt and North Africa
When I talk to Western bankers and economists, they see
the world as 3 regions: The Americas, Europe Middle East
and Africa (EMEA), and Asia Pacific. My view of the world
is a little more complicated based on population,
proximity and store of resources:
North America and Canada
Latin America
Europe
Middle East and Africa
Russia
Central Asia
China and Asia Pacific
I believe that Egypt and Egyptian companies can and do
play a similar role in Africa and the Middle East i.e. be
the conduit between the Middle East and Africa, and the
consumer nations. In terms of population and resources,
Africa has the potential of being a stand alone economic
entity. Forty years ago, who would have thought that China
would be the economic power it is today?
Africa and China
There is a final ingredient in the mix. Don’t look to your
tradional markets for growth!
In the 1800’s, British trading hongs in HKG made their
fortunes by being the intermediary between China and
Europe. In the 1960’s this role was surplanted by Chinese
trading firms.
However, China would not have prospered without that great
engine of consumption, the USA. Many companies and
individuals in HKG started their fortunes by facilitating
trade between China and the USA.
Most forecasters have called for anemic growth in Europe
and the USA. So, where should your companies be looking
for opportunities if not in their traditional marklets?
The answer, of course, is China. The annual trade between
China and Africa amounted to some USD100 billion. Most of
this in exports of energy and mining products from Africa
to China and imports of Chinese manufactured goods.
However, the Chinese government is encouraging domestic
consumption as a replacement for weak exports to the USA
and Europe. It is pumping USD586 billion into the economy
in 2009 and 2010 as a stimulus package. And remember, a
dollar in China goes much further than a dollar in the US.
When you combine this with a population of over 1.4
billion, and household and corporate savings amounting to
150% of GDP, this makes for a very scary growth story.
Just imagine selling one of your products to every
Chinese! And that by the way is not so far fetched. China
Mobile, the largest of 2 mobile phone operators, has 527
million users.
Conclusion
The Chinese economy grew at a comparatively anemic 8.7%
last year (because of the Financial Tsunami) after a
decade of double digit growth. As the world economy
recovers, I expect China’s growth to resume the previous
trajectory and wil one day take over as the engine of
growth for the world.
To the companies represented in this room tonight, The
Best of The Best in Egypt, I encourage you to take
advantage of this once in a lifetime opportunity to
participate in the growth of the Chinese economy.
1.4 billion Chinese customers are waiting for you. Go get
them.
Thank you.
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A continent's challenge 11/6/2008
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Bountiful in resources and plagued by conflicts, Africa
still has a long way to go before economic integration,
Rehab Ahmed reports
Creating an integrated common African market appeals to most
African countries, but the task is daunting. The African
continent is home to 13 per cent of the world's population,
which is expected to rise from 950 million to 1.8 billion by
2050. This is one reason why Global Trade Matters (GTM), a
Cairo-based forum on international trade agreements,
organized a round table discussion on the future of private
investment in Africa.
The round table on doing business with Africa focused on the
future of the continent's economic unity, and identifying
some of the problems faced by the private sector investing
on the continent. African nations, realizing the importance
of economic unity in dealing with internal economic
problems, have founded many economic communities. The most
notable are the African Unity (AU), the Economic Community
of West African States (ECOWAS), the Common Market for
Eastern and Southern Africa (COMESA), the Economic Community
of Central African States (ECCAS) and Southern Africa
Development Community (SADC). However, with respect to
economic achievements, many of these integration schemes are
perhaps nothing more than free trade arrangements.
South Africa's Ambassador to Cairo Sonto Kudjoe believes
that Africa should not always wait for foreign investments,
but works on increasing inter-trade on the continent.
Speaking at a round table discussion in Cairo two weeks ago,
Kudjoe cited several potential trade relations. In terms of
commodities, she said, Egypt could export cotton and has a
strong petrochemical sector; South Africa is distinguished
by its mineral, auto-motive industry and IT sectors; while
the Ivory Coast is a major producer of cocoa.
According to Ashraf Naguib, managing director of GTM,
already existing African Regional Economic Communities
(RECs) are very weak, and overall are not achieving their
targets. "However, this rule cannot be generalized since
SADC and COMESA are seen as the essential building blocks
for the integration and economic development of the African
continent," stated Naguib. He added that these are the most
appropriate political structures providing pertinent
geographical scale to implement policies aimed at
transforming the social, economic and political well-being
of the African continent. "I believe that inter-African
directed investment is needed, but most African countries
have economic complexities," he said.
African economic integration unions should be judged
independently, since each has its own peculiarities, but
generally, coordinated efforts and funds are needed.
"Regional economic unions are doing well in one area or the
other," noted Kudjoe. "SADC has strong infrastructure and
good transportation which helps countries trade easily among
it." On the other hand, she continued, "we face a situation
of duplicating efforts because of overlapping membership
between SADC and COMESA."
South Africa's ambassador further explained that projects of
the same nature are duplicated as well. "The lack of
coordination among regional entities raises the question of
how much Africans can really benefit from them," Kudjoe
stated. "If they integrate they would be able to consolidate
their resources and focus their efforts."
For his part, Bassel Hussein, chief investment officer at
IT Ventures, underlined that African regional blocs need to
further involve the private sector and be more empowered via
activating already existing associations. Naguib concurred,
saying that, "African leaders should make use of private
sector funds to help develop infrastructure projects."
But Hussein pointed out that the major challenges facing the
private sector in Africa are the political risks represented
in internal and external wars, conflicts and riots, as well
as shaky regulatory laws. "When the private sector goes to
invest in any African country, it needs to have solid and
binding agreements with local governments," he said.
Political instability and armed conflicts drive back local,
neighboring and international private investors.
Ambitiously, Hussein suggested that warring nations should
end all conflicts in order to make use of the continent's
mineral and human resources, as well as raw materials. He
noted that politically stable countries -- such as Egypt,
Tunisia, Morocco and South Africa -- attract foreign
investments and their economies are doing well. On the other
hand, Hussein continued, countries like Kenya, Senegal,
Nigeria, Mozambique and the Ivory Coast are emerging
economies, while Central Africa still has a long way to go
in achieving political constancy and eventually appealing to
foreign ventures.
As stated, there are various levels of economic development
in terms of regions and countries which will impact how fast
Africa moves towards economic integration. Hebatallah
El-Serafi, from the Research and Development Department at
the Cairo Stock Exchange, emphasized that most African
countries have neither efficient microeconomics, currency
convertibility nor a unified currency.
Africa's frail infrastructure is usually cited as another
major hurdle on the road to African economic integration.
Focusing on Egypt, Naguib argued that, "Egypt itself does
not have a reliable internal infrastructure. Consequently,
trade between northern and southern Egypt is lacking, as is
trade with Sudan, or even further south." GTM's managing
director further pointed out the fact that Egyptians define
themselves as Arabs, Muslims, Mediterranean, and finally as
Africans. "This means that they do not focus on their
African identity as much as South Africans do," Naguib said.
El-Serafi suggested that African countries should begin by
establishing bilateral cross- listing and cross-trading
agreements and regional blocs. This will be the focal point
for a pan- African common market capable of competing with
the Chinese, for instance, on the African and global arena.
But obstacles facing African economic unity will not vanish
overnight, especially that each nation needs to individually
decide its requirements and priorities before being part of
an African entity. In the belief that Africa must play a
more active role in the era of globalization, the African
Union (AU) is developing a strategic economic partnership
with Asia, India, China and Europe. Kudjoe noted that, "we
are now, as a multilateral body representing the African
continent, have multilateral agreements with other countries."
5 - 11 June 2008
Issue No. 900
Published in Cairo by AL-AHRAM
© Copyright Al-Ahram Weekly. All rights reserved
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