A jet-setting Egyptian billionaire shares his secrets on investing in times of turmoil

The investment mantra of Egyptian billionaire Samih Sawiris is simple: “I will not go where anyone else is successful. I have to be the pioneer.”

The owner of Orascom Developments, who with a net worth of around $1.4 billion is one of Egypt’s richest individuals, made a name for himself by building luxury apartments and hotels in some of the world’s most unloved areas.

Projects include the El Gouna resort on the Red Sea, the Cove Rotana Hotel in Ras al Kaimah and Taba Heights on the Sinai Peninsula. Currently under development are luxury complexes in Andermatt, Switzerland, Oman, Morocco, Montenegro and Cornwall and several others in Sawiris’ homeland. All are built to carbon-neutral specifications, and run almost entirely on self-sustaining heating systems.

But the combination of the financial crisis, volatility in the global property market and the socio-political turmoil in the Middle East have seriously dented Orascom’s revenues. Net profit for the first three months of 2011 was down 98 per cent to SFr600,000 (about $718,000) from SFr26 million during the same period last year .

Hotel revenue of the Switzerland and Cairo-listed company plummeted 40 per cent in the first quarter, as occupancy rates in Orascom’s Egyptian hotels fell to 42 per cent, according to the results released earlier this month.

Orascom’s property revenue was also hurt by the unrest, dropping 71 per cent from the first quarter of 2010.

Sawiris admits it has been a torrid few months.

“It was a challenging time. During the demonstrations, squatters moved in to the properties. My stress levels tripled. We had to postpone several projects to compensate for the cash flow of the overall company,” he said.

But he is upbeat about the future of Orascom, and believes that his propensity to diversify in different regions will help revenues bounce back. “Thank god we diversified early on,” he said.

Sawiris believes now, more than ever before, investment opportunities abound. “Extraordinary opportunities only happen when it is no longer about rational buying or selling. In many sectors there has been panic selling and reluctance to buy, which presents an opening,” he said.

Listed Egyptian companies will be first on his wish list. ““I will be looking very closely at the Egyptian stock market moving forward. The prices now is are absolutely ridiculous. The prices are still depressed by the political situation. The value of several companies is far below the value of their underlined assets,” he said.

He says Orascom Telecoms, his brother Nassef’s company, was one of the few companies listed on the Cairo Stock Exchange to stay stable during the unrest. Since the beginning of this year it has fallen by a marginal 4.7 per cent, compared to the stock exchange which has crashed by a quarter since January. But it will be a certain type of Egyptian stock that Samih is interested in.

“I will invest in real estate firms. There are companies that have receivables in dollars that are greater than their market capital. Can you imagine? That is a joke. If the dollar goes up in theory, you could buy that company from within,” he said.

The eurozone troubles has also piqued Sawiris’ interest, and he says Greek shares are on his shopping list too.

“Everybody is downbeat on Greece these days, and that’s when I become interested. I don’t believe the European Union can afford to lose Greece. Because losing Greece will put so much pressure on Portugal, Spain, even Ireland, that the EU would collapse. I believe we have a window with Greece, where they will survive in spite of their bankruptcy.”