Egypt-based EFG-Hermes acquires 51% stake in Pakistani brokerage firm

Egyptian investment firm EFG-Hermes has acquired 51 per cent shares of the Pakistani brokerage company Invest & Finance Securities Limited (IFSL). The firm is keen to expand its brokerage arm by injecting new liquidity.

Most experts predict foreign investment in the Pakistan Stock Exchange to surge once the index is included in the MSCI-EM Index. So what happens to the brokerage business? Some say brokerage business at the PSX will generate more revenue due to factors such as the new PSX Chinese management, MSCI inclusion, new investments and financing products.

EFG-Hermes has acquired 10.2 million shares of IFSL at Rs15 per share. IFSL CEO Muzzamil Aslam believes EFG-Hermes investment is an expression of its confidence in the Pakistani economy and its market. The acquirer is planning to penetrate further in the Pakistan markets. The Egyptian company believes the Chinese management would introduce new products, which would present an opportunity for brokers to increase their market share.

EFG-Hermes recently organised a “one-on-one” conference in Dubai. The conference held more than 8,500 direct meetings of over 500 investors from 260 global financial institutions. The conference had quite a few Pakistani companies, which held over 250 meetings with Middle Eastern investors. Aslam believes the ME region is Hermes’ niche market, and with its brokerage office at the PSX it will be able to better serve its clients.