Egyptian investment bank EFG Hermes said it will acquire Nigerian broker Primera Africa as it pushes to expand its capital market business across frontier markets. EFG Hermes said it entered Nigeria because it was one of the largest frontier markets globally with long-term growth opportunity after undergoing a series of reforms including currency devaluation.
It did not disclose how much it was paying for the 100 per cent stake in Lagos-based Primera Africa, which offers brokerage and research services to local and foreign investors. Primera will operate under the EFG Hermes brand name after the deal closes at the end of August 2018. “We are entering a market that has a compelling story to tell investors,” EFG Hermes said in a statement. The announcement comes a month after Absa said it planned to join Nigeria’s bourse as a broker in July after the South African firm bought a securities license.
Nigeria’s stock market was among the best performing in the world last year after the central bank liberalised the Naira for investors. However, the market is down 4 percent this year as rate hikes in United States trigger capital flight. Mohamed Ebeid, co-CEO of EFG Hermes said Nigeria accounted for the largest share of its brokerage executions and revenue among all frontier markets in which it had indirect execution in 2017. EFG Hermes, one of the largest investment banks in the Middle East, has entered Pakistan, Kenya and Bangladesh over the past 12 months. Prior to that it operated in Egypt, Saudi Arabia, United Arab Emirates, Kuwait, Jordan, Lebanon, Oman and the United States.
It recently won a license to operate in Britain. The company said it would utilize its Nigerian presence to serve as a hub for expansion into West Africa, much like what it has done in East Africa with a hub in Kenya. Nigeria’s stock exchange, the third largest in Africa, has in the last few years said it was reviewing applications from leading global investment banks to join its trading floor to increase foreign investment in one of the world’s least tapped emerging markets.
