JEDDAH, 23 July 2007 — Recent changes in the Saudi Arabia’s financial culture bode well for the development of the investment market. The GCC (Gulf Cooperation Council) region is changing rapidly, adding to its traditional reliance of commodities — particularly oil — financial trading and investment. Saudi Arabia in particular, with over 70 percent of the GCC population and 70 percent of the wealth, is in the view of Christian R. Mouchbahani, CEO of Jeffries Investment Bank in the Middle East and North Africa (MENA), a key area in the region and one that offers tremendous potential for growth.

In his view the challenge developing the markets in the Kingdom is something of a groundbreaking exercise and one with tremendous potential.

“People in the Kingdom have been quite receptive,” he said of approaches to corporate and individual investors in the Kingdom. “Saudi Arabia is the best example in the region of a change in attitude.” He noted that there was still much work to be done. “But they are — importantly — changing very quickly, in attitude, in openness. It still remains a complicated market where one needs a lot of patience.” He said that Saudi Arabia was a market where closing deals took longer but, because of its size and wealth, it was a key market. “With the necessary patience and different approach, it will be successful.”

With 10 months behind him as CEO of Jeffries Investment Bank, Mouchbahani is not new, however, to the financial culture of the region.

He was previously head of investment banking at Dubai Bank, where he led the bank’s entry into merchant and investment banking, and expanding the product and geographic reach.

Prior to that, he was director, at The National Investor, an investment banking and private equity firm where he completed one of the first Islamic corporate sukuk’s in the world.

He describes his current challenge as “firmly establishing the company in the region” and to provide advisory services to advise companies on acquisitions in the region and outside.” The highest profile project so far is the involvement of the acquisition of Aston Martin by Kuwait’s the Investment Dar (TID) that took the lead in the 479 million sterling pounds acquisition of the Aston Martin car company in the UK.

“We are also involved in capital-raising for companies in the region and are approaching investors outside the region to invest in companies here, structuring and placing funds and extending our abilities to do so,” he added.

Mouchbahani said that the Middle East was “our natural home — especially with 150 bankers in the company who specialize in nothing but the oil and gas sectors.” This he felt gave the group particular strength in the advisory area in oil and gas and with Saudi Arabia at the heart of Jeffries local strategy he was actively seeking ways to enter its market.

“We provide a unique product for investment — convertibles and corporate convertibles — and provide focused advice in these areas for the global market for corporations with the aim either to raise capital or invest it.”

There were local issues that Mouchbahani saw as having to be handled sensitively. Based on the company’s work with growing businesses in the region and the concerns of investors when approaching the region as an area for investment he saw accountability, transparency and openness to outside capital as “obviously clear challenges.”

However, he was sanguine about the development of the markets in Saudi Arabia and the region as a whole.

The reality is that the landscape has totally changed over the last six months to a year and it continues to change very quickly. If you look at Saudi Arabia the issuance of the new capital markets is a step in the right direction,” he said.

He felt that the establishment of new local and international banks in Saudi Arabia would considerably facilitate and create the necessary financial infrastructure and have the added effect of guiding the merchant families and established businesses in that direction. “It’s an education process,” he suggested, “and you have to create the market.”

As one who was the first to complete an Islamic corporate sukuk, he saw great opportunity. “If you look at the sukuk market — the government sukuk — there are plenty. But there are no sukuk at the corporate level. I believe there is a step in that direction, that there is an effort both in the Kingdom and the Gulf to move in that direction,” he said.

The creation of high yield bond offerings, Islamic bonds, sukuk, or convertibles at the corporate level was, thought Mouchbahani, an area where lot of the capital raising was at government level — not at middle market level and was therefore open to expansion.

Mouchbahani identified several areas that Jeffries is looking to develop. One was the advisory business.

“We see clearly when we talk to Saudis there are opportunities as well as across the Gulf especially with respect to mergers and acquisitions. The capital has focused on this region and not so much on Europe,” he said.

There were also opportunities in private equity funds where corporate and family businesses were trying to consolidate in certain sectors — “so we see the advisory role in the region in certain sectors such as financial industrial and others.”

A second opportunity he thought presented itself with the increasing tendency of the GCC to look eastward — India and China particularly where Jeffries is strongly represented. A third opportunity he believed lay in the growing trend of businesses in the Gulf and Saudi Arabia to acquire businesses in Europe and the US.

“Before they used to just invest financially, but today they acquire companies but also get involved in management and in creating global businesses — that’s why we see the advisory role as quite attractive,” he said.

While the market in the Kingdom was full of potential, Mouchbahani was clear about the parameters of the task ahead. “The traditions define that personal contacts at the right level, courtesy and putting in time and a lot of effort are the keys to moving forward in business here,” he concluded.