EFG Hermes, Egypt's biggest publicly traded investment bank, will expand into a sub-Saharan African country this year as part of a push to raise its frontier markets profile. The move follows its entry into Pakistan, Kenya and Bangladesh in the past two years.
"We're reinventing ourselves on a couple of fronts," Karim Awad, the firm's chief executive officer, told The National on the sidelines of a conference in Dubai on Monday. "We have moved out of the Middle East and North Africa to become more of a frontier bank. We started in Pakistan, opened up in Kenya and will open up in another sub-Saharan market this year. We can't disclose it at this point in time."
EFG, which has operations in six Middle Eastern countries, has endured difficult years following the Egypt’s 2011 revolution, with its business in the Arabian Gulf suffering following the collapse of oil prices in 2014.
The bank suffered a loss of 540 million Egyptian pounds in 2013 amid political chaos in Egypt that led to a foreign exchange crisis. Foreign investors meanwhile stayed away from the country and corporate activity dwindled, leading a drying-up of capital market activity. The bank's business has subsequently recovered however; it reported a profit of 1.4 bn pounds in 2016 in its most recently issued annual report, according to data from Bloomberg.
The bank has been expanding beyond the region into selected frontier markets in the past two years, often starting by covering listed companies that operate in frontier markets. EFG is looking to increase its headcount in its existing frontier market operations in addition to opening the new office in Africa.
Investment in frontier markets, where stock markets are in their nascent stages and register thin trading volumes, is a niche space that has garnered increased interest from international investors seeking better value stocks than developed market stocks.
The S&P 500, the benchmark measure of US equities, trades at a price-to-earnings ratio of 21.73, while the MSCI All World Country Index, a measure of developed world and emerging market stocks, trades at 18.98 times earnings, according to Bloomberg Data. Frontier markets trade at 16.33 times earnings.
While frontier markets span a broad geographic range, Mr Awad told The National the bank will be selective in its approach.
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"We're very careful about our expansion strategy, we are not going to plant our flag everywhere," he said. "We want to make an impact in every market that we are in. It's not just about presence in the market, it's about our positioning in those markets. So we want in every market that we operate in to have a good presence too."
Within the Middle East, Mr Awad said he is particularly upbeat on the growth prospects of Egypt and Saudi Arabia. EFG believes that Egypt’s central bank will further reduce interest rates this year, a move that would spur a rally in Egyptian stocks.
The central bank raised interest rates to as high 20 per cent in November 2016 to attract attract investment back into the Egyptian pound, after the country devalued its currency to unlock a $12 billion bailout package from the International Monetary Fund.
"We believe that interest rate cuts that our macro-economist is forecasting will definitely help rally the market,” said Mr Awad. “It will definitely alleviate the pain of high financing costs and will encourage more investments going forward."
EFG’s research arm last month raised its recommendation on stocks in Saudi Arabia to overweight, ahead of expectations that the shares in the kingdom will be included in the widely-trcaked emerging market indexes of index compilers MSCI and FTSE.
Ticket prices
General admission Dh295 (under-three free)
Buy a four-person Family & Friends ticket and pay for only three tickets, so the fourth family member is free
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The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
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Send “thenational” to the following numbers or call the hotline on: 0502955999
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The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
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The biog
Name: Abeer Al Shahi
Emirate: Sharjah – Khor Fakkan
Education: Master’s degree in special education, preparing for a PhD in philosophy.
Favourite activities: Bungee jumping
Favourite quote: “My people and I will not settle for anything less than first place” – Sheikh Mohammed bin Rashid.
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How to wear a kandura
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- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
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The biog
Alwyn Stephen says much of his success is a result of taking an educated chance on business decisions.
His advice to anyone starting out in business is to have no fear as life is about taking on challenges.
“If you have the ambition and dream of something, follow that dream, be positive, determined and set goals.
"Nothing and no-one can stop you from succeeding with the right work application, and a little bit of luck along the way.”
Mr Stephen sells his luxury fragrances at selected perfumeries around the UAE, including the House of Niche Boutique in Al Seef.
He relaxes by spending time with his family at home, and enjoying his wife’s India cooking.
