EFG Hermes shares slump after Qatar deal fails

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Shares of Egyptian investment bank EFG Hermes dropped 5.5 percent at the opening of trade on Thursday after its planned tie-up with Qatar's QInvest failed the previous day.

The drop triggered a half-hour suspension of trade in EFG.

EFG agreed a year ago to spin off part of its assets to create an investment bank with operations spanning the Middle East, Africa and Turkey.

QInvest would have pumped in $250m for a 60 percent stake.

On Wednesday, EFG, one of the largest investment banks in the Middle East, said it plans to cut costs, sell non-core assets, and return cash to shareholders after the tie-up plan failed.

The two parties said in a joint statement that the deal had been terminated due to lack of regulatory approval from Egypt and that they would continue to operate as independent entities going forward.

In a separate statement to the Egypt bourse EFG said it will seek to reduce its "expenditure structure" by 35 percent to 500 million Egyptian pounds ($72.11m) in 2014 from 780 million pounds for 2013.

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