MEO – Said Eweidy, a financial markets analyst, said that the Egyptian businessman Neguib Sawiris sealing the deal to acquire CI Capital, Commercial International Bank’s (CIB) investment banking arm, and merging it with Beltone Financial Holding (BTFH) that he has acquired recently will cut the ground out from under the smaller securities companies and brokerage firms working in The Egyptian Stock Exchange (EGX). Yet, this is not considered a monopoly, but it is to attract major investing portfolios; especially the foreign ones.
He pointed out in a statement to ‘MEO’ that EGX is suffering from a cash shortage; thus, small entities or companies, especially the ones with many branches, have to put up with losses under such circumstances; consequently mergers or acquisitions are the perfect solution to avoid losses and to counter the crisis in the market.
He added that Sawiris’ acquisitions will re-assess investment banking sector in the Egyptian market. It will also give a positive image of investing in Egypt and the world; as Sawiris has channeled new investments in Egypt.
Eweidy has called on the necessity of allowing small brokerage companies to merge and encourage them to take this step by offering facilitations; so that they can counter the cash shortage and stock retreat crises, and stop layoffs and shutting branches.
Orascom Telecom Media and Technology (OTMT), whose chairman of BOD is Neguib Sawiris, has managed last November to seal a deal of purchasing the BTFH; while it has offered this December to acquire 100% per cent of CI Capital shares, the bid that has been already approved by CIB.
According to the performances of securities companies and brokerage firms in EGX, the Sawiris- CI Capital- Beltone deal will re-arrange the ranking map of brokerage firms in EGX; as CI Capital- Beltone’, if the deal is sealed, will snatch top spot from its primary competitor EFG Hermes with acquisition percentage exceeding 25 per cent in market, according to the arrangement of the brokerage firms’ performances during the past 11 months ending last November that are worth EGP 74m.
The gap between the competitors will increase, after EFG Hermes has recorded EGP 44.8mn performances with 15.4 per cent acquisitions out of the total EGX performances last November.
It is expected that Sawiris’ new entities will stir up competition between CI Capital and EFG Hermes Holding; after CI Securities Brokerage and Dynamic Brokerage Company, subsidiaries of CI Capital, have acquired 20.4 per cent and 0.6 per cent respectively of the Stock performances; and Beltone acquired 4.5 per cent against 8.8 per cent and 6.6 per cent achieved last November by Brokerage Financial Group and Hermes Securities Brokerage, subsidiaries of EFG Hermes Holding. Both deals made over nvestments over the past 2 months at an average value of EGP1.6bn, it is noteworthy that the Pioneers Holding Comapny fpr nvestments acquired Ruya Company for Real Estate Investment worth EGP1.2bn, while Dice Company for garments acquired a share of the Al Sabbaghoun Al Motahedoun Company worth EGP41.3m.
The Sixth of October for Development and Investment Company (Sodic) acquired all the shares of Tabrok Company for Reconstruction worth EGP191m, while Giza Power Industries, a subsidiary of Pioneers, acquired a company for manufacturing electrical cables valued at L.E.286m.
ICMI Egypt Company for Medical Industries acquired 42 per cent of the shares of Alfa Medica Group, worth EGP4.88m.
Raya Technology and Communication acquired one of the Egyptian bank’s ATM machines worth EGP65m, while Misr Cement – Qena acquired ASIC Minya Cement and ASEC Ready Mix Concrete for L.E.1bn.
