An investment bank revives along with Egypt

Many cheered Egypt’s convulsive revolution in 2011 and its aftermath. EFG Hermes, the country’s dominant investment bank, was not among them.

Foreign investors and tourists fled. The economy collapsed, and the bank’s top two executives faced corruption charges because of their ties to the family of Egypt’s ousted president, Hosni Mubarak.

Now, with the Egyptian economy experiencing a remarkable revival under its autocratic president, Abdel Fattah el-Sisi, EFG Hermes has re-emerged as the go-to investment bank in Egypt — bringing companies public and funneling foreign investor money into the country’s booming stock market.

In what has been a generally lackluster year for emerging markets, Egypt’s stock market has stood out, soaring more than 30 percent in 2014 (as of Dec. 1), a return that trails only the Indian stock market among large developing economies.

As with India under its reforming prime minister, Narendra Modi, the bullish case for Egypt presumes that Mr. Sisi can fulfill his radical promises to overhaul the country’s economy by cutting energy subsidies, increasing private sector investment and reducing the budget deficit.