Foreign investment in companies quoted on The Saudi Stock Exchange (Tadawul) is gathering momentum, according to pioneering investment house, HSBC Saudi Arabia.
In just the six months since limited access to share trading in KSA was granted to non-resident foreign institutions and individuals, HSBC Saudi Arabia has purchased over 100 million shares, valued at over SAR 4-billion, on behalf of foreign clients.
“The pace of foreign investment in KSA-quoted companies has been picking up noticeably over the period, despite various challenges and difficulties facing financial markets all over the world”, said Osama Shaker, Managing Director and Head of Investments at HSBC Saudi Arabia.
“The value and volume of purchase trades completed by HSBC Saudi Arabia for more than 30 prominent foreign-based investment institutions is a particularly significant achievement given depressed market conditions everywhere. This reflects both the confidence of investor institutions in the Saudi economy and the strength of our company and the excellent reputation it enjoys abroad.”
The ground-breaking move last August by the Saudi Government allows non-resident foreign investors (institutions or individuals) to trade Saudi Companies' shares listed on The Saudi Stock Exchange (Tadawul), through authorized persons (such as HSBC Saudi Arabia) which retain legal ownership of the shares. These arrangements are known as Swap Agreements.
Osama Shaker added: "The Capital Market Authority (CMA) has been continuously working on encouraging investment in the Saudi market and has judiciously used SWAP Agreements to gradually open the market to foreigners. HSBC is proud to have worked closely with the CMA to launch this product, which is now a popular means to provide indirect exposure to one of the more established global emerging markets."
28 FEB 2009
The Saudi Binladin Group successfully completed the issuance of a privately placed SAR Sukuk of finance raising more than SAR 1 billion from the capital markets in Saudi Arabia. The Sukuk has a 5 year maturity with semi- annual profit payments.
This is The Saudi Binladin Group’s debut Sukuk issuance into the Saudi debt capital markets. HSBC Saudi Arabia was the sole Lead manager and bookrunner for the issuance.
This innovative issuance has to its credit several firsts including, being the first unrated Sukuk of its size to be successfully distributed entirely within the Kingdom and the first issued through an offshore special purpose vehicle which is registered, cleared and settled through Tadawul.
The Sukuk proceeds are to be used for the construction of an iconic hotel project that The Saudi Binladin Group is developing in the Holy City of Makkah.
Engineer Yahya Mohammed Binladin, Vice Chairman and CEO of The Saudi Binladin Group, said: "One of the goals of The Saudi Bin Ladin Group is to support the capital markets of Saudi Arabia and develop the growth of Islamic financing in the industry. Additionally this inaugural issuance enables The Saudi Binladin Group to establish a presence in the Saudi capital markets and substantially broadens the company's investor base to include private investors and other entities”.
Timothy Gray, CEO of HSBC Saudi Arabia stated "This issuance has seen strong interest from the sophisticated investor community in Saudi Arabia. This interest is reflective of the high esteem with which The Saudi Binladin Group is regarded with in the Kingdom and also recognizes our credentials as a leader in the Sukuk and debt capital markets. HSBC's Islamic brand, Amanah, is synonymous with leadership, innovation and professional delivery and this issuance confirms our position as the premier Islamic finance provider in the Kingdom and around the world." Fahad Al-Saif, Associate Director, Investment Banking Finance comments: "We are always keen to lead the development of Islamic financing industry and Saudi capital markets innovative solutions such as this issuance. This Transaction stresses our integrated Islamic and innovative financing solutions capabilities which HSBC will deliver in Saudi Arabia "
17 Sep 2008
HSBC has jumped from third to first place in the latest annual Banker magazine survey of the world’s top one thousand banks (Top 10001). HSBC is the first non-US company to lead the survey since 1999 and tops the rankings by virtue of its Tier 1 capital and profit before tax, which last year reached a new high.
The survey found that US banks now account for just 14 per cent of aggregate Top 1000 pre-tax profits, down from 24 per cent last year, while Asian banks rose to 19 per cent from 12 per cent. European bank profits remained flat at 41 per cent of the total.
In April, HSBC also topped the Forbes 2000 list of world’s largest companies - the first non-US company to do so, having delivered 26 percent growth in annual revenue and 31 per cent in net income over the past five years.
It is worth noting that the HSBC Group is present in Saudi Arabia through its strategic partnership with the Saudi British Bank "SABB", where the group owns 40% of the bank's capital, in addition to their partnership in other areas such as HSBC Saudi Arabia and SABB Takaful.
11 July 2008
In continuous efforts to develop and support investors in the capital markets, the Capital Market Authority (CMA) amended on Monday 01/04/1429H, corresponding to 7th April, 08, the license of: HSBC Saudi Arabia Limited Company to include conducting Dealing as principal, and underwriter, Managing, Arranging, Advising and Custody in the Securities Business.
HSBC Saudi Arabia offers a full range of investment services tailored to fit individual client's needs and actively works on providing the best solutions for the local market.
9 April 2008
HSBC Saudi Arabia Ltd. provides opportunities to invest in the global emerging markets
HSBC SA Ltd. began receiving subscription applications for its new investment Shariah-compliant Fund “HSBC Global Emerging Markets Fund” subsequent to the success of their other Funds previously launched.
HSBC Global Emerging Markets Equity Fund (GEM) aims to provide long-term capital growth by investing in a diversified portfolio of Shariah-compliant equities with an official listing on a major Stock Exchange or other Regulated Markets of emerging market countries, as well as in equities of companies listed on other Stock Exchanges and Regulated Markets which carry out a substantial part of their economic activities in an emerging market country. The Fund will pursue its objective through active management of a portfolio of Shariah-compliant equities.
The Fund’s investment universe will comprise more than 15 emerging market countries; typical emerging market countries include Brazil, Russia, China, Taiwan, South Korea, Mexico, India and South Africa with a possibility to invest in any geography falling within the scope of emerging markets depending on the emerging opportunities.
Subscription applications will be received during the initial launch period which extends to 05 March 2008 at a price of USD 10 per unit. Investment will be available to the Company’s customers and other non-company investors. The Fund is open-ended and subscription applications will be accepted after the initial launch period. The actual fund investment date will be 06 March 2008. The Fund units will be valued twice a week, and the date for reception of subscription and redemption applications will be before 12:00 PM on Monday in respect of the valuation day of the next Tuesday, and before 12:00 PM on Wednesday in respect of the next Thursday valuation.
01 March 2008
HSBC Saudi Arabia Limited, the Financial Advisor and Lead Manager for the initial public offering (“IPO”) of Rabigh Refining and Petrochemical Company (“Petro Rabigh”), has announced that the preparation work for Petro Rabigh IPO is proceeding smoothly. Timothy Gray, the Chief Executive Officer of HSBC Saudi Arabia, has confirmed that all receiving banks’ branches will be ready to receive investors’ applications for 219 million shares between Saturday 5/1/2008 until the last day of subscription on Saturday 12/1/2008.
Mr. Gray mentioned that the share price has been determined based on the institutional bookbuilding process at SR 21 representing SR 10 par value and SR 11 premium, with a total offering size of SR 4,599 million. 50% of the IPO shares will be offered to Saudi individuals and the remaining 50% will be offered to selected institutional investors. The Lead Manager reserves the right to reduce the institutional allocation from 50% to 25% in the event that retail demand is sufficient and upon approval of the CMA. The minimum subscription is 10 shares and the maximum is one million shares.
With regard to the allocation of shares, Mr. Gray mentioned that a maximum of SAR 37.5 million worth of shares will be allocated to Petro Rabigh employees. The allocation to retail subscribers will be performed in two stages: in the first stage, each subscriber will get a minimum of 10 shares. During the second stage, and in the event there is a sufficient demand by retail subscribers, each subscriber for 50 shares or less will get full allocation of what he applied for provided that total shares allocated do not exceed total shares offered to retail subscribers (162,464,286 shares). The balance of the Offer Shares (if available) will be allocated on a pro-rata basis.
The Company has appointed all local banks as receiving banks in order to facilitate the participation of all Saudi citizens in this Offering, as Mr. Gray mentioned.
Mr. Gray also said that the reason behind the delay in announcing the above information is the need to coordinate with the Japanese partner (Sumitomo Chemical) which is a publicly listed company in Japan that has certain disclosure requirements towards its shareholders and the regulators of the stock market in Japan.
Petro Rabigh, launched in September 2005 as a 50:50 joint venture between Saudi Aramco and Sumitomo Chemical, is one of the largest combined oil refinery and petrochemical production facility ever to be built at one time. Saudi Aramco will supply Petro Rabigh with the feedstock necessary to operate the plant, including ethane, on a long-term, fixed-price basis and will market the refined products produced by Petro Rabigh. Sumitomo Chemical will provide petrochemical international sales and marketing expertise, as well as technology licensing.
Petro Rabigh’s mission is to inspire its employees to ensure that it is the global leader in its industry. Through its strong ethics, human talent, best practices and diversified products, the company will meet the needs of its clients and add value for its partners, customers, shareholders, employees and communities. Petro Rabigh is committed to environmentally sustainable development.
25 December 2007
HSBC Saudi Arabia Limited has added two new local equity funds to its local equity fund family with the launch of the HSBC Saudi Equity Index Fund and the HSBC Petrochemical Equity Opportunities Fund.
The new funds, which capitalize on the company’s local capabilities and expertise, position HSBC Saudi Arabia Limited as the top provider of local equity funds in terms of diversity and number. And their launch brings the total number of mutual funds offered by HSBC Saudi Arabia to 30.
Both of the new investment funds are open-ended and both aim to achieve capital growth over the medium to long term.
The HSBC Saudi Equity Index Fund will invest in a portfolio of equities of selected companies listed on the Tadawul and corresponding to the constituents of the HSBC Saudi Equity Index. The HSBC Saudi Equity Index is comprised of about 37 stocks which are representative of the market capitalisation of the broad range of economic sectors in Saudi. The companies included reflect the breadth and depth of the Saudi stock market, from banks to bookstores, and from petrochemicals to publishing.
The HSBC Saudi Petrochemical Equity Opportunities Fund is a more specialized investment vehicle, investing in expanding petrochemical companies listed in the Saudi equity market.
Osama M Shaker, Head of Investments, commented: “This is an exciting move for us and for local and international investors in Saudi equity funds. The HSBC brand is a familiar and trusted one in Saudi Arabia and around the world but these are the first funds to be issued here under the banner of HSBC. This is an extremely exciting development for us and adds significantly to our existing offering of Saudi funds which have seen strong growth and increasing interest in recent years.”
Please click below for more information on the funds:
