EFG Hermes looks to Saudi business, Nigeria for expansion
Egypt’s first smartphone maker plans expansion in Africa
DUBAI, Oct 9, (RTRS): Egyptian investment bank EFG Hermes hopes to close a deal to acquire a Nigerian broker next month and is hoping to win IPO mandates in Saudi Arabia as it seeks new growth markets.
Saudi Arabia could be a major growth market for EFG Hermes, which is the biggest investment bank in the Middle East but derives much of its business there from Egypt and the United Arab Emirates.
It has already announced plans to expand its staff as it targets mandates in Saudi Arabia, where it expects the IPO market to pick up by the end of this year.
Mohamed Fahmi, co-head of investment banking, told Reuters on Tuesday that EFG Hermes was looking to win mandates to advise on private sector IPOs and mid-market mergers and acquisitions in Saudi Arabia.
Many potential candidates for IPOs in the kingdom are looking at dual listings and at issuing global depository receipts (GDRs), he said.
These listing options have not been approved yet but the Capital Markets Authority of Saudi Arabia is looking to implement them, he said.
The Saudi market, with a capitalisation of about $500 billion, is bracing for heavy inflows of foreign funds in 2019 – analysts predict $20 billion or more – as it joins emerging market indexes compiled by MSCI and FTSE Russell. Saudi authorities are working on initiatives to deepen the market with initial public offers of equity.
On Nigeria, EFG Hermes announced in July that it would acquire Lagos-based Primera Africa, which offers brokerage and research services to local and foreign investors. The bank favours the country’s long-term growth potential after the country introduced a series of reforms including currency devaluation.
An EFG spokesperson said on Tuesday the deal is expected to close in November subject to regulatory approval and certain conditions.
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CAIRO: Egypt’s first smartphone maker is looking to enter the broader African market by the end of 2018 or early 2019 as it seeks to boost exports, its sales director said.
Silicon Industries Corporation (SICO), which already exports to the Gulf, aims to start selling phones in
Kenya, Morocco, the Democratic Republic of Congo, South Africa, Nigeria, Mozambique and Ghana, Sales Director Mahmoud Ali told Reuters.
“It’s a promising market and there’s much less competition than in the Gulf,” Ali said, noting big demand for affordable phones in Africa. He said he mostly expected to sell smartphones in the $50 to $60 price range to African customers outside Egypt.
SICO, which was set up last year with capital of 150 million Egyptian pounds ($8.4 million), sells phones under the brand name Nile X and has said it uses a Chinese design of 3G/4G US technology.
Private investors hold 80 percent of the company and the remaining 20 percent is held by Egypt’s Ministry of Communication.
In 2019 the company aims to export 40 percent of its production and keep 60 percent local, Ali said. It also wants to expand its market share in Egypt from 12 percent to 15 percent in 2019, he said.
He said it was too early to set a sales target for exports to African countries, but he expected to export more to customers in Africa than in the Gulf next year.
“We are still entering the market and talking to people,” he said. “We are working with several operators and hoping that will be available at their branches at the end of 2018 or early 2019.”
The company expects to triple its total production from 500,000 units in 2018 to 1.5 million units in 2019, Ahmad el-Sawaf, SICO’s international business development manager said. Of the 1.5 million, 900,000 would be sold in Egypt while 600,000 would be sold abroad, he added.
He said the company targets sales of 400 million pounds this year, tripling to 1.2 billion pounds next year. The target for 2020 is 2.5 billion pounds, he said.
The smartphone maker plans to introduce new phones next year, offering a total of 14 products, he said. SICO currently offers six products, including smartphones and a tablet, he said.