Sell-Side Overview
With widespread vaccine administration, strong fiscal and monetary policy support, and resurfacing investor optimism, markets were primed for a recovery. Despite residual economic turbulence across our footprint, EFG Hermes’ sell-side division was able to continue capitalizing on this gradual return to normal and on the groundwork laid in 2020 to deliver outstanding operational and financial results.
Our Securities Brokerage arm performed soundly throughout the year, leveraging a boom in retail trading activity and the concurrent increase in volumes. The division continued to maintain its leading rankings across its regional footprint, with EFG Hermes Securities Brokerage ranking first on the Egyptian Exchange, Dubai Financial Market, and NASDAQ Dubai. The division also held its second-place position in Abu Dhabi. Our strength across MENA markets mirrors our performance in the Frontier Emerging Markets (FEM) space despite a range of macroeconomic difficulties across our Sub-Saharan African and Southeast Asian market coverage. The division held onto its first-place ranking in Kenya for the second year running, while continuing to tap into its solid on-ground track records and experience in the foreign institutional space in the market to make further strides in Pakistan and Nigeria in the coming year. We have also worked on updating EFG Hermes One, introducing a fresh user interface with a range of new features, even propelling the platform across Egyptian borders to Kenya where users can now experience online stock trading on the Nairobi Securities Exchange (NSE). We also facilitated the third and fourth iterations of the EFG Hermes Virtual Investor Conference, setting up over thousands of meetings and bringing hundreds of regional and global investors closer to unlocking formidable investment opportunities in the region.
In 2021, our Investment Banking division delivered outstanding results in the face of fears of inflationary pressures, Omicron-induced supply chain hurdles impacting our clients, and a reduced risk appetite amongst investors. Our activity in GCC markets in particular stands as a testament to the division’s resilience and execution capabilities, as we continued to capture significant opportunities across all our product range – ECM, DCM and M&A – throughout the year This has culminated in a series of successful transactions, including our first deal close in Pakistan. The division played pivotal roles in facilitating 7 ECM transactions across the GCC, 6 of which were IPOs. Most notably acting as joint bookrunner on the USD 1.2 billion IPO of Saudi Arabia’s ACWA Power on the Tadawul, as well as the highly successful public debuts of ADNOC Drilling and Fertiglobe for USD 1.1 billion and USD 795 million respectively on the Abu Dhabi Exchange. Other prominent deals for the year included our advisory on Abu Qir Fertilizers’ USD 143 million follow-on share sale transaction as part of the Egyptian government’s privatization agenda, as well as our advisory on Integrated Diagnostics Holding’s (IDH) listing on the EGX, marking the country’s first dual listing between the Egyptian bourse and the London Stock Exchange (LSE). This year, we booked an impressive 41 deals with a cumulative value of over USD 7.9 billion.
Our Research division maintained its position as the leading provider of fundamental-based research in the region, facilitating sound financial decision-making for our own teams and clients alike. During the year, the division played key roles in supplying the Firm’s various departments with valuable insights and powering transactions across the board. The division maintained its position across key industry polls, once again being named the leading Frontier Research House and second-ranked MENA Research House in the Institutional Investors’ 2021 poll, amongst other accolades. Having significantly expanded the Firm’s coverage across the MENA and frontier markets over the course of the year, our Research division was crucial to the enhancement and expansion of our product and services roster this year.
Despite growing uncertainty around the emergence of new COVID-19 variants, our outlook in 2022 remains highly optimistic as we forecast more sustained recovery throughout the year. Operationally, we will continue to monitor global market conditions, which will enable us to seek compelling ECM and M&A propositions in key MENA and FEM markets; particularly in fast-growing economies such as Vietnam and Indonesia. We will continue to fortify our brokerage business, in efforts to expand our market share with the backing of our robust portfolio of institutional investors and retail-focused tech offerings. On the Investment Banking front, we are looking to capitalize on growing DCM activity in both our Egyptian home market and abroad by introducing a myriad of new products and services to meet heightened demand. Building on our efforts in 2021, we are also keen on resuming IPO activity in the coming year, having already established a substantial transaction pipeline for the DFM and ADX. The strength and expansion of our one-of-a-kind Research arm will also work to develop its offering, looking to effectively position EFG Hermes to meet constant demand for market-leading insights services in the face of economic uncertainty and market volatility.
Looking back on the last two years and then widening the lens to look at the last two decades and beyond, cements one thing for me: that our performance lays on the foundation of resilience, which rests on the shoulders of our exceptional sell-side teams’ steadfast commitment. It is this commitment — to the clients we serve, the markets we operate in, and the communities where we do business — that gives me confidence that 2022 will be another milestone year for the Firm.