RIYADH, 28 August 2007 — Saudi Hollandi Bank announced yesterday that the Capital Market Authority (CMA) has officially licensed its affiliate, the Saudi Hollandi Capital Company (SHCC), which will begin operations in the capital market’s securities sector as a principal and agent.
According to Sulaiman Al-Suhaimi, Saudi Hollandi Bank’s chairman, the company will provide management, financial, and consultancy services, hold client portfolios, and act as an investment advisor to capital market customers.
The grant of license by the CMA to the Saudi Hollandi Capital Company follows its decision to issue a number of licenses to companies that specialize in providing financial services in the Saudi market. The Saudi capital market has continued to attract interest from the both national and international financial institutions so as to make the Kingdom’s bourse the most important one in the region.
In this context, the SHB chairman commented that the CMA’s licensing of SHCC would enable it to offer the most innovative investment services in the country. “The timing of its establishment was ideal, with the Kingdom’s economy set to attract unprecedented amount in foreign direct investment, particularly in the financial sector.”
Al-Suhaimi highlighted that the new company, an affiliate of SHB, will enjoy the support of two major financial organizations — foreign partner ABN Amro and Saudi Hollandi Bank, which have extensive experience in providing financial services through Saudi Hollandi Bank’s branches all over the Kingdom. “The founding of SHCC, which will oversee our securities operations, will enable Saudi Hollandi Bank to focus on developing our creative banking services that will fulfill the aspirations of our individual and corporate clients, including personal financing, project financing and other valuable services,” he added.
The bank will soon start registration procedures for Saudi Hollandi Capital Company. The CMA has already licensed more than 67 investment companies to engage in securities operations. According to a Royal decree, banks have to set up new financial institutions for investment activities in the Saudi bourse.
Securitization in the GCC is a relatively new market, but the potential is said to be huge given the extent of quality real estate asset pools being developed. There are several reasons why securitization and alternative fixed-income instruments are set to take off in the GCC.
The huge surplus liquidity in the region is chasing more value-added products. Even high net worth investors are constantly demanding more sophisticated investment products in place of the usual investment products.
The launch of investment companies in the Kingdom is a major development.