EFG Hermes, an Egyptian firm specializing in investment services and stock exchange brokerage, announced a plan to expand the business to West Africa and Nigeria, in particular.

“We are currently looking to expand our local offering to include fixed-income trading, a structured product offering, as well as a local investment banking offering,” said Ali Khalpey, head of the company's subsidiary in charge of frontier markets.

EFG Hermes entered the Nigerian capital market by acquiring the brokerage firm Primera Africa, which has a significant impact on the volume of transactions on the Nigerian Stock Exchange. The company plans to capitalize on the demand for Nigerian debt instruments such as treasury bills and long-term government bonds, despite declining yields and difficulties in repatriating funds by foreign investors.

The announcement comes at a very difficult time for the Lagos Stock Exchange. Trading volumes were only 103.5 billion naira (about $265.5 million), down 9.8% compared to May, and this is the lowest monthly trading volume since the beginning of 2020. Another challenge is that foreign investors feel trapped in Nigeria, even though the stock market valuation levels are very low and offer upward prospects for capital appreciation. Bond yields are lower than the level of inflation, and it is difficult to repatriate invested capital due to the restrictions imposed on money transfer operations by the Central Bank.

Idriss Linge