Dubai-based investment bank looks to capitalise on possible recovery in Arab country
Arqaam Capital agreed to buy El Rashad Securities Brokerage
from Al Rashad Holding to access Egypt’s market as the Dubai-based investment
bank seeks to benefit from a possible recovery in the North Africa nation.
The agreement will include El Rashad’s business, operations
and brokerage licence, Arqaam Capital said in an emailed statement on Sunday,
without providing financial details.
El Rashad was ranked 107th by value traded last year of 144
brokerages, according to the Egyptian exchange.
A drop of 49 percent last year prompted by the political
uprising that led to the ouster of former President Hosni Mubarak left the 31
companies in Egypt’s benchmark gauge valued at an average 5 times estimated
earnings, compared with 9.5 times for the MSCI Emerging Markets Index.
unrest drained 50 percent of the nation’s foreign reserves and slowed economic
growth to 1.8 percent from 5.1 percent in the fiscal year that ended in June.
“We have a positive view on Egypt in the medium- and long-
term,” Tarek Lotfy, managing director of capital markets, said in the
statement. “The Egyptian economy remains supported by strong fundamentals and
we are committed to investing in and building a regional brokerage platform to
ensure our clients can take advantage of the country’s growth and development.”
Arqaam’s acquisition comes amid a decline in the number of
brokers in the United Arab Emirates, after regional instability and Europe’s
debt crisis pushed the volume of shares traded in Dubai to a six-year low,
forcing some firms to shut. Arqaam Securities was ranked fifth of 57 brokerages
by value of shares traded in December, according to the Dubai Financial Market’s
Arqaam’s third-quarter loss narrowed to AED611,000 ($166,000)
in the third quarter after a loss of AED825,000 a year earlier.
Dubai’s benchmark DFM General Index fell 1 percent, the most
since Dec 21, to 1,335.03 today. It slumped 17 percent in 2011.
Egypt’s stock market, which rose 0.2 percent last week, was
closed for a holiday.