Khalid Mahmoud stresses importance of facing foreign currency's risks

Khalid Mahmoud, Chairman and Managing Director of MM Group for Industry and International Trade, said in a press interview with Arabs Today, that the company started its business for more than 100 years. He added that the main value of the company is to reach the Egyptian consumer through more than 40,000 points of sale covering more than 90% of all parts of Egypt, stressing that the company operates during the current phase in the field of phones and electronics.
Mahmoud said that the IPO was started at a price of 6.06 pounds per share. The minimum bid for the IPO is 100 shares with a maximum of 900,000 shares. 

He announced that the company has done a fund to ensure the stability of the share price for a month from the date of trading. He said that smart phones can be considered a luxury item, as the whole life is transformed into this small phone in the hands of everyone. However, more than 80% of the phones used by Egyptians are traditional mobile phones, which is against the global average of over 60%.

In addition, in terms of televisions and air conditioners, at least 1.4 million families are added to the system and electricity networks annually. The Egyptian market is witnessing a wave of transformation from traditional fans to existing family air conditioners and traditional television sets to LCD screens.

Regarding pound floating decision, he said there are various factors contributing to the increase in the demand for smart phones, and more so the volume of transformation from traditional phones to smart phones. "Egypt has 94 million mobile phone users and a three-year lifespan to operate the phone. This will generate more than 30 million phone per year, as well as the population of Egyptians dominated by a large segment of young people, which includes the natural growth of the spread of mobile phones.

Mahmoud expected that the introduction of the fourth generation in 2017 will affect demand positively, with 3% of existing phones in Egypt compatible with 4G services. "The entry of consumer finance is a key element of growth, and MTM has given clear indications that it is in serious talks to enter into activity which will open the door to significant growth in demand," he added.

Regading currency risk, he said: "The company has been able to develop a large plan over the years in the face of foreign exchange risk, as it has a cash balance in foreign currencies held until the currency stabilizes.

"This creates a natural hedge at currency risk, where activity in all scenarios of high currency appreciation or decline in the safe side, he added.

As a result, the company managed to earn 80 million pounds due to foreign exchange gains in 2016 through positive foreign exchange balances. However, it was completely excluded from any valuation of the company's performance.

The chairman of the board of directors announced that the company is preparing to be listed on the stock exchange in nearly two years to meet all the standards of corporate governance. The company has appointed three independent members of the board of highly qualified and highly respected in addition to the fact that family participation in the business is not large , and the central administration that manages the work, which was founded 25 years ago.

Regading profit distribution policy, Mahmoud said the company has consistently committed to distributing 50% of the dividend due to shareholders. "According to our estimate, it is about 10% to 12% of the first public offering". "Cash balances are still growing in the company's budget, representing 5% of the total", he stated.

" The company is a private placement and 15% of the public segment means that short-term individual investors will have no incentive at all to provide an immediate offer to sell shares or pressure on the stock price because it can easily pay back to the stock seller within one month, Mahmoud concluded.