EFG-Hermes, Egypt's largest investment bank by market value, acquired stakes in two brokerage companies yesterday, continuing an international expansion plan that has seen it move into the UAE, Saudi Arabia, Lebanon, Qatar and more recently Oman and Kuwait. EFG yesterday announced it had paid just over £3.16 million (Dh21.7m) for a nearly 10 per cent stake in Panmure Gordon, a London-based investment bank listed on the Alternative Investment Market (AIM). Following the purchase, EFG's clients will have access to research and investment products offered by Panmure in the UK and US. Panmure's clients will also be given access to EFG's research and investments in the Middle East.
"This only strengthens our ability to service our client base in the Middle East, UK and the US, which will continue to be the focus of our strategy," said Hassan Heikal, the chief executive of EFG-Hermes. He added that the partnership was "further testament to the growing importance of the regional markets on the global investment stage". Panmure shares rose by as much as 10 per cent on the AIM following the announcement.
EFG also announced yesterday that it was entering the Kuwaiti brokerage market. The bank said it had paid about US$126 million (Dh463m) for an undisclosed stake in Offset Holding, which owns 90 per cent of Gulf Financial Brokerage Company (GFBC). GFBC has a 26 per cent market share among Kuwaiti brokers, according to the Egyptian bank. EFG will manage and operate Offset Holding and GFBC under the terms of the deal. The bank views the partnership as particularly valuable because no new brokerage licences are being issued in Kuwait.
"The deal gives us direct presence there and will allow us to directly execute transactions on behalf of our clients and grow our market share under the EFG-Hermes brand name," said Mr Heikal. "With no new brokerage licences being offered for sale in Kuwait on the Kuwaiti market and no foreseeable change to the regulatory environment, there is substantial scarcity value in acquiring interests in a Kuwaiti brokerage firm."
The firm said GFBC made a net profit of 2.9m Kuwaiti dinars (Dh40m) in the first six months of this year.
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