Egypt's first lady of broking

With investor confidence dwindling, this may not be the best time to be in the capital markets game, particularly in an emerging market. But Neveen El-Tahri, who for eight years has been at the helm of the brokerage firm she founded, is determined to stay for the long haul, through the peaks and troughs of Egypt's stock market fortunes.

An essential ingredient in the formula of success is knowing how to get along with people, she says. "I love people. I think it is one of my best virtues. If I am sitting with the porter downstairs, I'll get along with him. If I sit with the ministers, I'll get along with them. I am easily adaptable." Making it in the business world takes more than hard work and people skills. "Success is partly luck," says El-Tahri one afternoon in her office. "I've been lucky in my choice of marriage. Many men wouldn't want a successful wife. I have a very loving and supportive husband."

Nor has being a woman in a male-dominated business culture held her back. "It's tough because they underestimate your capabilities. But at the same time, that toughness is the reason I probably succeeded. If they underestimate you, then it is quite easy to outsmart everybody else around you."

A diplomat's daughter and the eldest of three girls, El-Tahri was born in Cairo in 1958. But she could easily have been born in Panama where her father, Hamdy El-Tahri, was Egypt's ambassador to the country at the time. Life on the diplomatic circuit demands mobility and the family moved from Panama to Lebanon, Finland and Britain.

At the age of 15, Neveen El-Tahri returned to Egypt for good. Being constantly on the move was not easy, and she was searching for a place to call home. "It was such a difficult time because you move friends and you move cultures," says El-Tahri, who attended 11 different schools. "I couldn't speak any Arabic," she reminisces of her return to her birthplace.

"I really didn't want to leave Egypt. I wanted roots - unlike my sisters, who never got to feel the same, so they both live abroad. They've never lived in Cairo." Hamdy El-Tahri raised his three girls like three men, says his eldest daughter. Nermeen, the second oldest, is an executive with American Express in London and Jihan, the youngest, is a documentary filmmaker living in Paris.

Neveen El-Tahri graduated from the faculty of economics and political science at Cairo University in 1980. "I went to Cairo University because my father said it was the last chance I'd ever have to learn Arabic, and he did me the greatest favor in the world."

She married Imam Waked soon after graduation and has two children, Dina, 20, and Abdel Latif, 15. Her husband, a professor of medicine and a highly regarded liver disease specialist, heads the Liver Institute at Munafiya Hospital. "He is more my friend," El-Tahri says of him. "His success moves me to further success."

El-Tahri embarked on a career in banking at Chase National Bank, a joint venture bank between Chase Manhattan and the National Bank of Egypt. "It was the newest, hot marketplace," says El-Tahri. "There were many banks opening at the time and Chase was the largest." She spent her first year as a teller, which immersed her in the operational side of banking.

Selected to take an intensive six-month credit course at Chase Manhattan, she became a credit officer, which gave her a chance to apply what she learned in college: analyzing financial statements and deciding whether a proposed business venture is viable or not. Chase National later became Commercial International Bank (CIB) when Chase pulled out of Egypt.

El-Tahri describes herself as a workaholic. "I enjoy working. I enjoy accomplishing," she says. "I don't have to do things. I want to do things." But for El-Tahri, family still comes first. How does she juggle both family and business commitments? By prioritizing, she advises. "If you know where your priorities are, you are probably going to do a good job. My priority has always been my family. If I feel that my family is going to be harmed by the fact that I work, I will not work."

Time management is key, she says. "I knew what to do and how to do it. Everybody would stay late at work. I would leave, take my kids from school, and work from home." She says that has been a good example for her children, who grew accustomed to seeing their parents working and studying.

By the end of her 12-year career with CIB, she rose to assistant general manager of corporate banking in charge of the petroleum, electronics and tourism sectors. "I started not enjoying the job because I was not having a good relationship with my boss," she acknowledges. "So I just decided that maybe it was about time that I quit and stayed home, and I literally decided I didn't want to work anymore."

When El-Tahri resigned from CIB in mid-1992 there were three items on her agenda: to become fluent in German (she didn't want her children, who were enrolled in the German School, to speak in German when they didn't want her to understand), exercise and work creatively with her hands. "I've always done mental work. I've never done anything with my hands. I am not a good cook," she admits. "So I started drying and setting flowers, and doing pottery."

She took her first real holiday with Dina and Abdel Latif. For three summer months, she moved between Paris and London where her two younger sisters reside. On her return to Cairo, she taught marketing at the American University in Cairo, and then went on to a one-year consulting job at a newly established tourism company, where she recognized that success in business is all about effective management. "Tourism is very different from banking, but the concept of management is the same, and I've been a manager for a long time."

In 1994, by the end of her one-year stint managing a tourism company, a law regulating Egypt's capital markets was passed. The law covers joint-stock companies that offer shares to the public and companies that deal in securities, underwriting, company formation, venture capital, clearance and settlement, the management of securities portfolios and investment funds, mutual funds and book-keeping.

Not long ago, companies in Egypt were either state-owned or family-owned. Anyone with money to invest chose to deposit it in the bank or buy parcels of land. The only memories of Egypt's once-thriving capital markets - which were the fifth largest in the world - can now only be seen at the movies. A wealthy investor receives a call from his broker, who tersely informs him, "You have lost everything." The stock market baron drops dead from a heart attack.

The capital markets were a new investment vehicle. Recently privatized public-sector companies were the first to be offered on the revitalized Cairo and Alexandria Stock Exchanges. The capital markets were close to El-Tahri's experience in banking, and she applied for and received one of the very first brokerage licenses in July 1994. With her husband and father as partners, El-Tahri started Delta Stockbrokers. "In the beginning, I knew nothing about brokerages," says El-Tahri, "but no one else did, either. We are all competing at the same level."

As stock market investing picked up steam, the playing field was quickly crowded with more than 150 competing brokerages. El-Tahri wasn't in the securities business for the quick buck. "I'd learned a little on my own at the beginning and after five or six months, I decided to bring in institutional partners."
In mid-1996, 40 percent of Delta's total equity was sold to Egyptian American Bank (EAB) and a further 20 percent was sold to American Express Bank in early 1997.

The brokerage was renamed Delta EAB. At the same time, the rules and regulations of Egypt's stock exchange were revised to grant greater strength in mandating corporate governance, disclosure and transparency. For the first time, a board managed the capital markets, and El-Tahri was elected as a board member. In elections three years later, she received the highest number of votes.

In 1999, she concluded that the market needed a well-connected, skilled player with unmatched access to research. EAB and American Express were retail bankers, not investment bankers. She asked them if they would be ready to sell out to a partner with global capital markets experience. Enter Dutch bank ABN-AMRO, the eighth largest in the world. The brokerage was renamed ABN-AMRO Delta Securities.

ABN-AMRO acquired 59 percent of Delta EAB Brokerage, buying out the shares of EAB and American Express in addition to a five percent stake owned by Delta EAB Portfolio Management Company. ABN-AMRO also held 26.4 percent of Delta EAB Portfolio Management Company, which was renamed ABN-AMRO Delta Asset Management.

In October 2002, following the drop of the capital markets in emerging markets, ABN-AMRO chose to relinquish its Egypt operation, selling its stake to El-Tahri. (According to a non-disclosure agreement, the purchase price has not been made public.) Delta Securities has become once again a family business.

"It was a wise decision on their part," says El-Tahri, who remains the country representative for ABN-AMRO Bank in Egypt, "but it was an unfortunate decision on my part."
Since its founding, Delta has consistently ranked among the top 10 brokerages in Egypt. Rankings for 2002 may be prove lower as El-Tahri did not want high volumes to come at the expense of her bottom line.

"The majority of volume in the capital market has been in bonds, and bonds are very high volume with minimal revenue," she explains. "At the same time, linked to volume are high insurance costs. It's not worth competing on volume when you are losing money."

ABN-AMRO Delta has already downsized considerably in the past two years. It was forced to cut its workforce in early 2001, followed by another round of layoffs later that year. "It's not nice to downsize. But because the market is not there, you have to make those decisions." In an effort to further cut costs, the company moved to smaller, less expensive office space. The stock market does not look like it will pick up anytime soon and new sources of revenue in advisory and financial consulting services were sought to keep the business running.

The asset management division was first set up in late 1997 to manage individual and corporate portfolios of Egyptian equities. But asset management was not activated until ABN-AMRO joined in. "I needed to have the proper systems and know-how, instead of doing it the same way we all started brokerage - by trial and error," says El-Tahri. "There were already quite a few asset managers and fund managers in the marketplace. If you had to compete, you had better compete on a real solid professional level."

Designed to manage both local and foreign funds, systems were locally developed with assistance from ABN-AMRO in the Netherlands. "It was activated in the early 2001, after the markets were dipping," says El-Tahri. "In spite of that, it has done relatively well."

About 80 percent of business is in local equities. Other financial products include local bonds, money markets and funds. While no Sharia investments, derivatives or hedge funds currently exist in Egypt, clients have the option of buying those financial instruments abroad.

While the Egypt's capital markets have suffered from low trading volumes, they have attracted significant strategic investor focus, says El-Tahri. "It has become such a cheap market that it is very much worth looking into from a strategic point of view." But she does not expect stock buying to pick up for another 18 months. "It will never come back as high as where it left off in mid-2000, but it is going to be a gradual pickup."

El-Tahri is confident that Delta Securities and Asset Management will survive the current financial crisis. She doesn't aim to be the biggest player around, just the one with the most carefully chosen niche.