EFG Eurobank Ergasias has reached an agreement for the acquisition of a controlling stake in HC Istanbul Holding A.S., parent company of brokerage firm HC Istanbul Menkul Degerler A.S, a member of the Istanbul Stock Exchange.
EFG Eurobank Ergasias has reached an agreement for the acquisition of a controlling stake in HC Istanbul Holding A.S., parent company of brokerage firm HC Istanbul Menkul Degerler A.S, a member of the Istanbul Stock Exchange. The agreement was signed by international institutional and private shareholders of HC Istanbul Holding A.S., including HC Securities & Investment S.A.E., which controls 55.90% of HC Istanbul Holding A.S.
Following the completion of the transaction, which is subject to regulatory approval by the authorities, HC Istanbul Menkul Degerler A.S. the brokerage company, will aim at further expanding its already successful course in the Istanbul Stock Exchange over the past four years, as well as in the recently established Derivatives Exchange of Izmir. Moreover, the possibilities of expanding the company’s activities in the debt market in local and foreign currencies, and in institutional asset management, will also be enhanced.
HC Istanbul Menkul Degerler A.S. has been very successful in the area of investment banking and has a strong presence in transaction volume in the Istanbul Stock Exchange on behalf of European and U.S. institutional investors. The firm’s market share in 2004 was 1.52%, whereas during February 2005 it reached 2.3%, against a market share of the leading brokerage firm of 5.9%. During 2004, HC Istanbul Menkul Degerler A.S. was recognized by international investment firms as the leading brokerage firm in Turkey in terms of its equity research capability. HC Istanbul Menkul Degerler A.S. has also been very active in advisory services in privatizations, mergers and acquisitions as well as in private placements of listed companies.
The company will continue its operations under the current management structure with its high level personnel led by Ms. Elif Bilgi, the current Managing Director with prior experience in Goldman Sachs and Morgan Stanley. Mr. Nikolaos Karamouzis, Deputy CEO of EFG Eurobank, will become Chairman of the Board.
The agreement to acquire HC Istanbul Holding S.A. is part of EFG Eurobank’s strategy to further expand its operations outside Greece also in the area of Capital Markets, in line with its policy for developing a strong presence in South Eastern Europe. Through the acquisition of the brokerage firm, EFG Eurobank gains access to Turkey, a large market in terms of population and size of economy, a few months after the European Union’s decision to launch pre accession negotiations with Turkey next October. At the same time, institutional, corporate and private Greek and international clients will have access to the entire spectrum of products and services offered in the Turkish and global markets.
The Istanbul Stock Exchange is one of the most dynamic emerging markets in the world with returns of 34% in $ terms during 2004, significantly higher than the MSCI Emerging Markets Index (21%). The daily volume of the market has increased substantially to $900 million in 2005 from $600 million in 2004 and $400 million in 2003. Currently, total market capitalization stands at $90 billion, with particularly lowfree float (27%), which is very interesting, considering that international institutional investors control 62.4% of the free float. These elements, along with the significant restructuring and M&A potential of the Turkish market, set the conditions for even higher growth rates in stock exchange transactions and investment banking activity.