EFG ties knot with Qinvest EFG-HERMES, Egypt's largest investment bank, has sealed a deal with the Qatari Qinvest, owned by the Qatar Islamic Bank, to form a regional investment bank. Qinvest will control 60 per cent of the new bank, which will be called EFG-Hermes Qatar, and provide $250 million to increase its capital. The rest will be owned by EFG-Hermes. The latter has the option to sell its 40 per cent stake to Qinvest within a year but before 36 months from the signing for LE1 billion, a move that would mean that EFG-Hermes would be swallowed by the new bank. The agreement is still pending the approval from shareholders and regulators. EFG-Hermes shares have been on the rise since the deal was revealed to complete a rally started in the last quarter. The stock is up 31 per cent this year, compared with a 37 per cent gain for the EGX30. According to an EFG-Hermes press release, the deal aims at creating a leading investment bank with operations covering the Middle East, Africa, Turkey and South and South East Asia. International reserves edge up MARKING its first increase since the 25 January 2011 Revolution, Egypt's net international reserves increased by 0.6 per cent on April to reach $15.2 billion. This, according to Central Bank Deputy Governor Nidal Assar Bloomberg, reflects the "phasing out" of capital flight and increased tourism spending, changes that may ensure a recovery takes root in coming months. Assar added that the increase does not include any external financing. CI Capital noted that an increase in demand on local currency deposits, after a one per cent point increase on local deposits two months ago, has decreased demands on foreign currency and thus improved reserves status. Meanwhile, the monetary policy committee decided Thursday to keep interest rates at their current level of 9.25 per cent for deposits and 10.25 per cent for lending. CI Capital expected reserves to end the fiscal year at $12.8 billion, versus army expectations of $10.4 billion. However, the investment bank pointed out that an upward revision of its estimate is expected in case international support funds from Saudi Arabia and the IMF start flowing into the country. Egypt's reserves were $36 billion before the 25 January 2011 Revolution. Egypt files arbitration case in Israel gas dispute THE EGYPTIAN General Petroleum Corporation (EGPC) and the Egyptian Natural Gas Corporation (EGAS), both state-run companies, have filed a request for arbitration against the Egyptian gas export operator to Israel, East Mediterranean Gas (EMG), Hani Dahi, head of EGPC, told Bloomberg. The two companies filed the request on 3 May after EMG breached the terms of the gas export contract by delaying gas payment dues for four months. EGPC and EGAS last month notified EMG, in which Ampal-American Israel Corporation owns a 12.5 per cent stake, of the termination of the contract. Ampal and other investors in EMG on 3 May said they had filed an arbitration request against Egypt over the contract's termination. Tourism revival THE NUMBER of tourists who visited Egypt in February increased by 257 per cent in comparison to the same month in 2011, says the Central Agency for Public Mobilisation and Statistics (CAPMAS). According to CAPMAS, more than 753,000 tourists came to Egypt in February. Moreover, the number of tourist nights has jumped by 83.4 per cent to reach 8.3 million compared to 4.5 million in February 2011. CAPMAS also pointed out that these numbers, despite the dramatic increase, have not reached pre-revolution levels. The total number of tourists who visited Egypt in February 2010 was 1.1 million. Muslim Brotherhood wants new government before IMF loan THE DEPUTY supreme guide of the Muslim Brotherhood and one of its most powerful figures, Khairat El-Shater, has said that his organisation and its political arm, the Freedom and Justice Party, told members of the Supreme Council of the Armed Forces (SCAF) and officials from the International Monetary Fund (IMF) that a proposed $3.2 billion IMF loan should be postponed until after this month's presidential elections. El-Shater also said in remarks at a meeting with members of the American Chamber of Commerce in Egypt that the Muslim Brotherhood agrees in principle with the loan as long as there is no other option to save the economy, but believes the deal should not be finalised by an interim government. "The loan should be postponed until a new government is formed because the new government might not find the terms of the deal suitable," he stated. "The government that signs the deal of the loan should be responsible for repaying it," he added. El-Shater pointed out that the Brotherhood respects all agreements that Egypt is signatory to as long as the other parties are committed to the terms of these agreements. The Muslim Brotherhood leader also said that all of Arab and Western businessmen he has met see great investment opportunities in Egypt but wait for stability and security. "The Freedom and Justice Party will present several legislative adjustments to parliament in order to create a better investment environment," El-Shater said.
