INTERNATIONAL. . HC Securities & Investment, a Cairo- based investment bank, is advising on three mergers and acquisitions in the Middle East as the region benefits from higher oil prices.
“We are working on three big M&As in the region that will exceed US$300 million” each, HC Securities Chairman Hussein Choucri said by phone from Cairo January 26. “We are very bullish on Qatar and Saudi Arabia, helped by higher oil prices.”
Average crude prices climbed 19 percent last year. Oil- exporting economies of the Middle East and North Africa may grow 4.9% in 2011, the International Monetary Fund said in September.
The fund forecasts growth of about 19% in 2011 in Qatar, making it the world’s fastest-growing economy.
In Saudi Arabia, King Abdullah announced last year a US$130 billion plan to build homes and create jobs, adding to a commitment in 2010 to spend US$384 billion over five years.
Political uprisings that ousted leaders in Egypt and Libya slowed regional mergers and hurt equity markets last year, with the volume of deals in Middle East and Africa falling 42% to US$37 billion, according to Bloomberg data.
“Our view is that economic activity will pick up, as the problem of somebody can be the opportunity of another,” Choucri said.
The MSCI Emerging Europe, Middle East and Africa Index slumped 23% in 2011, compared with an 11% drop in the STOXX Europe 600 Index. Trading volumes in Dubai slumped to a six-year low last year, with the benchmark DFM General Index losing 17% in the period.
Al Futtaim HC Securities LLC, a brokerage based in Dubai part-owned by HC Securities, decided earlier this month to shut operations in the United Arab Emirates.
“We could have lived with the low volumes if we had some visbility as to when things would turn around,” Choucri said.
The benchmark EGX30 plunged 49% last year as Hosni Mubarak was ousted, ranking it the third-worst performer among world equity indexes tracked by Bloomberg. It has surged 22 percent in January as the country held its first parliamentary elections after the revolution.
“Looking at Egypt, I believe the market has bottomed out,” Choucri said. Parliamentary elections indicate “the country is coming closer to normalcy. That will hopefully deliver a democratic Egypt that will grow its economy,” Choucri said.