Dubai Capital buys stake in Egypt's CIB

Dubai government-owned investor Dubai Capital Group has bought a 5.24 per cent stake in Egypt's Commercial International Bank (CIB), the companies said in a statement yesterday.

The Dubai group bought the shares from the Egyptian and London stock exchanges over recent months and its holding crossed the five per cent threshold in the last two or three weeks, CIB investor relations officer Sherif Khalil told Reuters.

Khalil said CIB, Egypt's largest publicly traded bank by market value, said it informs its shareholders when any group acquires five per cent or more of the bank.

Dubai Capital Group had informed the Central bank of Egypt of its acquisition but it did not need central bank permission, he added.

Dubai Capital Group Chief Executive Mustafa Farid Geninah said in the statement: "This investment (provides) us opportunities in an environment which has been challenged by the changes in the global financial services sector."

Another Dubai government-owned firm bought a 25 per cent stake in EFG-Hermes, Egypt's largest investment bank by market value, in November.

"The potential growth in Egypt is so much greater than in Dubai," said Angus Blair, head of research at Egyptian investment bank Beltone Financial. "The fall in the stock market has made the stock more attractive," he said.

Shares of CIB, which said in May talks to merge with Arab African International Bank had ended, have tumbled 20 per cent this year.

"It is a vote of confidence in CIB that a leading regional group such as Dubai Capital is investing and believes that CIB has the potential to develop its activities," said Elena Sanchez-Cabezudo, analyst at EFG-Hermes.

Egypt, the fourth-largest Arab economy, is growing at its fastest rate in two decades after the government cut taxes and sold state assets. The US buyout firm Ripplewood, the largest investor in CIB, leads a consortium that owns 18.7 per cent of the Egyptian lender.

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