Al-Rajhi Capital plans sukuk push, sees better year for IPOs

Updated 22 January 2014

Al-Rajhi Capital plans sukuk push, sees better year for IPOs

RIYADH: The investment banking arm of Saudi Arabia’s Al-Rajhi Bank, plans to expand its sukuk business, its chief executive said, tapping into heavy demand for Sharia-compliant products in the Kingdom.
Issuance of sukuk in Saudi Arabia has surged on the back of increased liquidity and comparatively low borrowing costs, and as corporates look to diversify their funding sources from the traditional mode of bank financing.
Corporates and state-owned entities in Saudi Arabia raised the equivalent of $15 billion from the sale of sukuk in 2013, compared with $11 billion in 2012 and just $2.8 billion in 2011, Gaurav Shah, CEO of Al-Rajhi Capital, said in an interview at his Riyadh office.
The state airports operator last year printed the largest-ever local currency sukuk deal worth the equivalent of $4.05 billion, and other well-known names including Saudi Binladin Group and Almarai completed riyal issues.
Shah said his firm, which has one of the largest asset management and brokerage businesses in the kingdom, planned to play a central role in underwriting, arranging and investing in sukuk.
“We see developing our sukuk capability across our businesses, and specifically investment banking, as a key priority. You cannot have a narrow telescopic view of the sukuk business,” said Shah, who joined the firm from Swiss lender Credit Suisse in 2009.
Riyadh-based Al-Rajhi Capital, formed in 2008, manages about SR30 billion ($8 billion) in its asset management business, a five-fold increase from 2009, Shah said, adding that the business focused on large institutions in the Kingdom such as endowments and insurance companies.
In 2014, the firm will concentrate on deploying existing funds rather than planning new fund launches, he said. It raised SR678 million last year from the launch of its second real estate income-generating fund.
“There is not much purpose in launching a flurry of products since we already have covered the main asset classes. At the end of the day, if you have a good product, it will sell.”
Al-Rajhi expects initial public offers of shares on the Saudi Arabian bourse to pick up pace in 2014 as equity markets recover and valuation multiples improve.
Saudi Arabia’s benchmark index rose 25.5 percent in 2013 on the back of improved economic performance and increasing risk appetite among investors.
Despite this, IPO activity in Saudi Arabia dropped last year. There were just five offers in 2013, raising $506.6 million, compared to the previous year which saw seven initial share sales worth $1.4 billion.
Saudi Arabia’s Al-Hokair Group, one of the largest entertainment and hospitality firms in the Middle East, plans to list on the Riyadh bourse in 2014, Reuters reported in November.
Health care and hospital chains in the Kingdom are also lining up to go public, tapping into heavy demand in the sector.
“Increased investor appetite for equities, and the fact that regulators want to further develop the equity markets, could make it a better year for IPOs in 2014,” Shah said.

Industry-specific ban on expats in Oman likely to remain, despite reaching recruitment target

Updated 25 April 2018

Industry-specific ban on expats in Oman likely to remain, despite reaching recruitment target

  • The Oman government imposed a recruitment ban on expats for 87 different lines of work in January
  • The initial target of recruiting 25,000 Omanis by May is almost reached, not the government is likely to double that number

DUBAI: Oman’s Ministry of Manpower has pledged to continue in its push to recruit locals over expats even after its target was reached, the Times of Oman has reported.

The government set itself a deadline of May, but it was already just 55 jobs shy of the 25,000 target, the report added, predicting that the remaining people would be appointed before the week was over.

Now the government is looking to double the target to 50,000 Omanis.

More than half of those recruited are men, according to government data, with male appointments accounting for 16,884, while 8,061 women were recruited during the same period. 

A ban on hiring expats in 87 professions was implemented in January as the Gulf country continued in its Omanization project, aimed at tackling high levels of unemployment among locals. 

And now the ministry has said Omanis should always be given priority over expats, when it came to hiring – adding that the ban would stay in force as long as there were Omanis suited to the positions.

Those people employed so far were appointed to private sector positions between December 2017 and April 2018, the report added.



The construction industry accounts for 32.4 percent of those recruited, with 14.5 percent going into the retail sector, 13.5 percent in manufacturing and 7.1 percent working in transportation.

A spokesman for the Ministry of Manpower said: “Most Omanis were hired in the construction sector as it has lots of job vacancies especially in the engineering, technical and administration fields.”

The push in Oman to recruit more locals is in line with other Gulf Cooperation Council (GCC) countries which are following similar projects, not least in Saudi Arabia and the UAE.




An extension to the expat recruitment ban?

Not only is Oman’s Ministry of Manpower considering extending the current recruitment ban on expats for 87 professions, but also adding other lines of work to the list.


In numbers

The most recent census in 2016 put the Oman population at: 4,550,538. But expats account for nearly half at 2.082 million. There are 2.463 million Omanis