Morgan Stanley, the US investment bank, is planning to buy into a financial advisory firm and a securities company in Cairo, both of which are run by former Morgan Stanley executive Hussain Choucri. The deal, which has yet to be approved by the authorities, would confirm a trend in foreign banks of setting up investment banking joint ventures in Egypt.
‘An affiliate of Morgan Stanley Group has executed a subscription agreement by which the…affiliate will purchase a minority stake in each of Hussain Choucri & Company Financial Advisers and HC Securities & Investment,’ says a statement from the Egyptian companies. ‘The proceeds of the transaction will be used for expanding the various operations of the companies in the area of financial advisory services, asset management, mutual fund activities and underwriting.’ If the deal is approved by the authorities, the joint ventures could be finalised by early next year.
The two Egyptian companies have been up and running for a year. Choucri has a team of 10 staff and plans to add three more in the near future. They are working on deals including a three-year note for a local bank, to be placed in the Gulf, and a £E 100 million ($29.5 million) corporate bond for a local borrower. HC Securities also manages about $300 million in client funds.
Morgan Stanley’s involvement in the Egyptian market follows that of global banking group HSBC, which is about to start up an investment banking joint venture with its local affiliate, Egyptian British Bank. At least two European investment banks are understood to be planning joint ventures of their own, as are at least two Gulf-based banks.