EFG-Hermes Jumpes To Month High On Qinvest Talks

EFG-Hermes Holding SAE (HRHO.CA) jumped to the highest in a month after it said QInvest LLC may hold a majority stake in an investment bank that the two are negotiating.

The shares surged 8.7 percent to 13.97 Egyptian pounds, the highest intraday level since March 29, at 12:47 p.m. in Cairo. The share was the biggest gainer and the second-most traded by value on Egypt’s EGX30 Index (EGX30), which rose 0.1 percent.

The investment bank would be the largest in “the Arab World, Africa, Turkey, South and South East Asia, with the possibility of QInvest holding majority stake,” Cairo-based EFG-Hermes said in a statement today. The investment may help EFG-Hermes ride Egypt’s worst political and economic crisis in at least 30 years after last year’s popular uprising.

“The name is jogging higher on the back of the QInvest news,” said Wafik Dawood, director of institutional sales at Cairo-based Mega Investments Securities. “The market is currently speculating on a super dividend payout.”

Profit of the largest publicly traded Arab investment bank slumped 81 percent in 2011 and its shares plunged 63 percent, under-performing the benchmark index. EFG-Hermes said its private equity business and Lebanese commercial bank Credit Libanais SAL, in which it bought a 65 percent stake in 2010, are excluded from the discussions.

QInvest, a unit of Qatar Islamic Bank (QIBK), concluded talks to acquire 60 percent of EFG-Hermes, Egypt’s Al Shorouk newspaper reported yesterday, citing an unidentified person familiar with the talks.

One analyst recommends investors buy EFG-Hermes shares, while four have a hold rating on the stock and one says sell, according to data compiled by Bloomberg.