EFG Gains as QInvest Deal Seen Gaining Regulator Approval

EFG-Hermes Holding SAE climbed the most in more than five weeks on speculation Egypt’s market regulator will approve an agreement to create an investment bank with Qatar’s QInvest LLC before the proposal expires.

EFG-Hermes advanced 3.3 percent to 9.71 Egyptian pounds at the close in Cairo, the biggest jump since since Feb. 28. About 1.4 million shares were traded, or 91 percent the three-month daily average, according to data compiled by Bloomberg. The benchmark EGX 30 Index rose 1 percent.

The agreement with QInvest is at risk unless it receives approval from the Egyptian Financial Supervisory Authority in the “coming days,” EFG, the country’s biggest investment bank, said today in a stock-market filing. The accord, signed May 3, is valid for 12 months, it said. EFSA Chairman Ashraf El Sharkawy couldn’t be reached for comment.

“Investors are betting on an announcement by EFSA before the offer expires,” Wafik Dawood, director of institutional sales at Cairo-based Mega Investments Securities, said in an e-mail. “Approval will pave the way for a 4-pound dividend, which is more than 40 percent at the current share price.”

QInvest, a unit of Qatar Islamic Bank, and EFG-Hermes plan to set up an investment bank with operations in the Middle East, Africa and Turkey, as well as southern and southeastern Asia. The takeover would include EFG Hermes’s main investment-banking, asset management and brokerage businesses, and exclude its private-equity business and Credit Libanais SAL unit.

EFG-Hermes shares have declined 12 percent this year, falling more steeply than the 7.9 percent drop in the EGX 30.

Before it's here, it's on the Bloomberg Terminal.