The Frontier Emerging is the Next Frontier: EFG Hermes USA Will Provide Global Clients with Access to Frontier Emerging Markets

EFG Hermes, the largest independent MENA investment bank, has recently acquired approval from FINRA to launch its US-based office through its subsidiary, EFG Hermes USA Inc. The newly launched office will provide North American clients with 24-hour access to the "Frontier Emerging," a group of more than twenty countries spanning from Nigeria, the Middle East, all the way to Vietnam. This group of emerging frontier markets is a corner of the global investment map that could soon be home to the world's largest ever initial public offering - and where growth has handily outpaced global averages.

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"The emerging frontier is made up of markets that offer plays on long-running themes including industrialization, fast-growing consumer markets and China's One Road-One Belt project. They are smaller emerging markets and larger frontier economies that together are expected to grow by 4% on average during 2017-2018," said Karim Baghdady, chief executive officer of EFG Hermes USA, Inc.

One of the key markets within this group is Saudi Arabia, which could potentially be home to the world's largest IPO, Saudi Aramco. The Saudi exchange is opening to foreign investors with a shift to a T+2 settlement cycle, and an upcoming upgrade to EM status on the FTSE benchmark next year. Furthermore, Saudi Arabia would potentially account for 2-3% of the MSCI EM index in 2019. With the possibility of inclusion in the MSCI emerging market status in 2019, Saudi Arabia's exchange would account for 2-3% of the index.

"These markets are full of compelling investment opportunities in industries as diverse as consumer foods, manufacturing, healthcare and transportation," noted Mohammed Ebeid, Co-CEO of the Investment Banking platform at MENA-based EFG Hermes Holding. "Further afield, we are in favor of a number of consumer and healthcare names such as Vietnam, Pakistan and Egypt - markets that benefit from a growing middle class and large populations."

"The challenges that we are here to tackle are the natural information asymmetry and the quality of counterparties on the ground," Ebeid added. "Our on-the-ground research and corporate access teams already cover economies with a combined GDP of USD 3.1 trillion and an aggregate population of 900 million, and we have had a presence in many of these markets over the last three decades. The opening of our New York office, our quality research coverage and execution capabilities in these markets will definitely bridge the gap between North American investors and compelling emerging frontier opportunities caused by the information asymmetry or lack of access to reputable counterparties."

EFG Hermes USA, Inc. is a member of FINRA and SIPC.

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Note on Forward-Looking Statements 

In this press release, EFG Hermes may make forward-looking statements, including, for example, statements about management's expectations, strategic objectives, growth opportunities and business prospects. These forward-looking statements are not historical facts but instead represent only EFG Hermes' belief regarding future events, many of which, by their nature are inherently uncertain and are beyond management's control and include among others, financial market volatility; actions and initiatives taken by current and potential competitors; general economic conditions and the effect of current, pending and future legislation, regulations and regulatory actions. Accordingly, the readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. 

SOURCE EFG Hermes