Dubai – (Masaader News)
EFG Hermes, the leading financial services corporation in the Middle East and North Africa, inaugurated its office in Pakistan, making it the first foreign investment bank to directly enter the market and the first foreign broker to have a local footprint in the countrysince 2008. The opening follows the Firm’s acquisition of Pakistani brokerage Invest and Finance Securities Ltd. (IFSL), which will operate as EFG Hermes Pakistan Limited.
The launch of EFG Hermes Pakistan underscores our commitment to serving as a positive partner for economic growth and development and as a conduit for foreign investment into Pakistan. The launch comes days before the 31 May upgrade of Pakistan to MSCI Emerging Market status, which has prompted significant interest in the nation’s opportunities from global investors with emerging market mandates since late last year. Pakistan will constitute 0.15% of the MSCI Emerging Markets Index at upgrade.
“Pakistan is a very exciting market today with compelling long-term growth prospects, whether the pending upgrade to emerging market status, the IMF’s growth forecast of 5.0% in 2017 and 5.2% next year or the opportunities that will be driven by the China-Pakistan Economic Corridor that has lately attracted significant attention. There is no more opportune a moment to enter the market,” said Karim Awad, Group Chief Executive Officer of EFG Hermes. “We are making a long-term commitment to Pakistan that has already seen us invest in recruitment, systems, technology and processes in the run-up to the relaunch of IFSL as EFG Hermes Pakistan, and we look forward to becoming a key player in the market in Karachi, Lahore and beyond.”
“In moving into Pakistan and other markets, our goal is to replicate our growth out of Egypt into the Gulf Cooperation Council in the early 2000s, where we have become the leading securities brokerage across multiple GCC exchanges and the advisor of choice on high-profile M&A and cross-border equity capital market transactions across the region. Pakistan and other new frontier markets we will enter in the coming period will diversify our fee-based agency business, generate new streams of hard-currency revenues and position us to create superior returns for our shareholders,” Awad added.
“Pakistan was our first choice for geographic expansion outside what was previously our core MENA footprint, sharing as it does many of the same characteristics as Egypt, our origin market,” noted Awad. “Both jurisdictions are very large consumer markets. They have similar GDP, similar daily market turnover in US dollar terms and similar commission margins in addition to very similar market dynamics, with institutional investors accounting for 40% and 36% of daily executions in Pakistan and Egypt, respectively.”
According to London-based CEO of EFG Hermes Frontier Ali Khalpey, “IFSL was a unique opportunity to acquire an excellent platform on which to build a major market player by partnering with a strong domestic management team with a niche business. Now that we are well advanced into the integration process, we will be particularly focused on securities brokerage, research and on investment banking advisory, a role where we are traditionally intermediaries between foreign capital investors seeking outstanding opportunities and domestic businesses seeking the capital they need to grow.Accordingly, we see opportunities to grow the brokerage team and expand our on-the-ground research presence. On the international institutional side, we have scaled up the business to fully service institutional clients as well as global investment banks who want to transact in Pakistan with a renowned, international name. We will also be pushing ahead with new voice and mobile trading for high-net-worth individuals as we upscale our existing retail brokerage business this year.”
Khalpey added, “In addition to a reconstituted board and the EFG Hermes platform that is composed of best-in-class expertise gained through a successful track record of managing an expansive global network of institutional, corporate and sovereign clients, we have added our innovations, leverage and expertise to the local entity. Our on-the-ground presence in the country will act as a springboard for other companies to enter the Pakistani market as the economy sees a period of growth.”
EFG Hermes Pakistan offers securities brokerage and research services to institutional and individual clients as well as investment banking advisory services to Pakistani corporations and foreign investors. The team employs 59 professionals on the ground in Karachi and Lahore and has steadily grown both its headcount and market share in the past two quarters.
EFG Hermes Pakistan is led by Muzzammil Aslam, an industry veteran who joined IFSL (acquired by EFG Hermes in March 2017) from JS Global Capital, where he was variously executive vice president, head of business development and head of research.
“EFG Hermes’ reputation, people, systems and leadership in MENA markets, combined with the deep local knowledge of our domestic management team, leave us very well positioned in the Pakistani market. EFG Hermes has been laying the groundwork for this entry for over a year, having recently invited nearly 44% of the potential MSCI Pakistan Index to attend the Firm’s flagship One on One Conference,” said Aslam. “Strong interest in Pakistan and inflows so far this year into both emerging and frontier markets will create significant opportunities for our Firm in the coming period.”
The launch event, held last night in Karachi, was attended by top officials from the Pakistan Stock Exchange (PSX) and representatives from top Pakistani listed companies and financial services corporations operating in the domestic market along with EFG Hermes senior management officials.
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