Startup of the Week: Saudi fintech joins battle for US retail investors

Startup of the Week: Saudi fintech joins battle for US retail investors
the Jeddah-based firm, launched in March 2020, supplies research-based information that private investors can use to make long-term investments. (Shutterstock)
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Updated 16 January 2022

Startup of the Week: Saudi fintech joins battle for US retail investors

Startup of the Week: Saudi fintech joins battle for US retail investors
  • Quant Alpha platform offers artificial intelligence-powered software for investors

RIYADH: Saudi entrepreneur Nezar Bakhsh has joined the battle for US retail investors after launching a financial technology startup that sells stock trading advice to traders.

His Quant Alpha platform offers artificial intelligence-powered software for investors, which he told Arab News: “Adds a layer of simplicity, reliability and academic rigor to investment strategies”.

The Jeddah-based firm, launched in March 2020, supplies research-based information that private investors can use to make long-term investments.

Quant Alpha, which employs five full-time staff and 30 freelancers, is aimed at investors in US stocks and is focused on small-cap investments — firms with a market capitalization between $300 million (SR1.1 billion) and $2 billion. 

Bakhsh, 27, added: “We’re targeting high-net-worth clients in the US, UK, Germany and Switzerland, who tend to be tech-savvy investors who understand and appreciate our software. 

“In the future, we have plans to build a system for the Tadawul as well as the Shanghai market and the London Stock Exchange.”

The fintech firm, which does not act as a fund manager or broker, has 500 current subscribers, and Bakhsh said he expects sales of over $1 million in the financial year to 2022. Quant Alpha aims for rapid growth, targeting over $13 million of income from 50,000 subscribers at the end of its third year.

The US retail investor market is seeing firms offer zero, or low, trading fees for small traders. California-based small investor platform Robinhood has grown rapidly since its 2013 launch to around 13 million users, while Virginia-based E-Trade has about 5.5 million retail and corporate accounts. These firms also offer some trading advice.

Bakhsh, 27, came to finance after an early start in science and engineering. 

He gained a bachelor’s and a master’s degree in electrical engineering at Pennsylvania State University, before joining Saudi government-financed construction startup Istidama. That led to a three-month project in China, where he was part of a team that successfully converted farm waste into fertilizer and animal feed. 

Soon after that Bakhsh found himself with time on his hands back in the Kingdom during the COVID-19 lockdown. Fascinated by the stock market, he began developing his own investment and trading strategies. 

Bakhsh said: “My results started to show great promise. And a couple of friends also started seeing some profit using my strategies. 

“One of them said: ‘All these online investment software platforms charge a hefty amount, they don’t work, and they’re not backed by any academic research. They are a complete rip-off. What if you started leasing your software?’ That got the ball rolling.”

Baksh said that his platform, which he funded himself, is backed by a great deal of data.

He said: “Our member base gets access to all our research, to some proprietary indicators and to our best performing portfolio, which is powered by our own AI algorithms.”

“We have what’s called a ‘multifactor portfolio’, based on four key factors — momentum, value, quality and size — all which are rigorously researched by the academic community.”

Baksh has published his trading strategies as an e-book, available exclusively to Quant Alpha subscribers.

He said: “Informed investors are the best clients to have because they understand the cyclic behavior of a portfolio. The difference between investors who actually make money, and ones who lose, are those who understand their portfolio and are willing to be patient during times of underperformance.”

Bakhsh noted that similar to his own experience, the pandemic lockdown triggered a huge interest in the stock markets from small investors in the US who could not go to work.

Around 15 percent of American retail investors began trading in 2020, according to a survey in April by US financial services giant Charles Schwab, which owns E-Trade.

However, many seasoned market observers say that a significant proportion of the trading by these new investors is led by anonymous tips on trading message boards, which can lead to wild stock price swings of companies that come across their radar.

Bakhsh said: “Unfortunately, I don’t see many private investors doing extensive research. They just keep trying things out and not sticking with them for the long-term.”

But this rush of new investors represents an opportunity for the Saudi platform.

Bakhsh added: “I’m definitely excited by this huge flood of new investors. I hope I get a chance to educate a lot of them. I’m doing my part and hopefully it will work out for us and our clients.”


Saudi sovereign wealth fund considers new hydrogen company; developing 70% of vision 2030 renewable target

Saudi sovereign wealth fund considers new hydrogen company; developing 70% of vision 2030 renewable target
Updated 14 min 13 sec ago

Saudi sovereign wealth fund considers new hydrogen company; developing 70% of vision 2030 renewable target

Saudi sovereign wealth fund considers new hydrogen company; developing 70% of vision 2030 renewable target

RIYADH: Saudi Arabia’s Public Investment Fund is now establishing a new hydrogen company and it will be like a mediator in many of the PIF’s initiatives.

Speaking in a regional forum on ESG organized by the Future Investment Initiative in London, the governor Yasir Al-Rumayyan said the sovereign wealth fund  plans to develop 70 percent of renewable energy targets under vision 2030.

The fund owns companies that are already developing hydrogen such as NEOM and Aramco. 

Rewilding Arabia
Return of the leopard is at the heart of plans to conserve and regenerate Saudi Arabia’s landscapes and wildlife
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PIF governor and BlackRock’s CEO leads discussions on ESG in emerging markets in FII’s first regional summit

PIF governor and BlackRock’s CEO leads discussions on ESG in emerging markets in FII’s first regional summit
Updated 20 May 2022

PIF governor and BlackRock’s CEO leads discussions on ESG in emerging markets in FII’s first regional summit

PIF governor and BlackRock’s CEO leads discussions on ESG in emerging markets in FII’s first regional summit

RIYADH: The Future Investment Initiative Foundation will host its first ever regional summit on Friday, in Rosewood London, England, entitled Inclusive Environmental, Social and Corporate Governance in Emerging Markets.

The most prominent participants in the event include the FII Chairman and Governor of the Public Investment Fund, Yasser Al-Rumayyan, Egypt’s Minister of Environment, Yasmine Fouad and Blackrock CEO Larry Fink.

The summit will bring together international investors, world leaders, thought leaders, policy makers, global CEOs, and chiefs of sustainability to discuss and shape the future of ESG, particularly in emerging markets.

“The planet has major problems with climate, with destruction of nature, peace and security. But we also have tremendous resources, including our common humanity,” Executive Director of the FII Institute, Richard Attias said.

“We believe that ESG is an important tool to bring us together and channel capital to meet these challenges,” he said.

Using ESG standards to make investment decisions is a global boom, with assets expected to reach $53 trillion, about a third of global assets under management, by 2025, a statement showed.

Still, the lack of a framework for the effective implementation of ESG in emerging economies represent a stumbling block for investors. 

The FII says it will finally have the tool needed to develop sustainable investment strategies in these markets, through its proprietary measurement framework, developed in collaboration with investors, global companies, and FII’s strategic partners.

The Foundation works to impact humanity across four focus areas: artificial intelligence, robotics, education, health care, and sustainability.

The event is part of a series of events hosted by the Foundation, which will culminate in the sixth edition of the annual FII Forum in Riyadh, Saudi Arabia, in October.

 

The PIF view

The PIF understands that being engaged in ESG is the right thing to do, Rania Nashar, head of compliance and governance at the fund, told the conference.

PIF companies are announcing emission reductions but it's not only about the destination, it is about the journey, she added.

“We approach the ESG through multiple aspects. Through creating platforms, sponsoring events and launching initiatives,” she said.


China’s April Saudi oil imports soar 38 percent on year, Russian oil up 4 percent

China’s April Saudi oil imports soar 38 percent on year, Russian oil up 4 percent
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Updated 20 May 2022

China’s April Saudi oil imports soar 38 percent on year, Russian oil up 4 percent

China’s April Saudi oil imports soar 38 percent on year, Russian oil up 4 percent

China’s crude oil imports from top supplier Saudi Arabia soared 38 percent in April from a year earlier, hitting the highest monthly volume since May 2020, according to Reuters’ calculations based on official Chinese customs data.

Saudi shipments amounted to 8.93 million tons last month, equivalent to 2.17 million barrels per day, according to data from the Chinese General Administration of Customs.

The hefty purchases, with trades completed mostly in February, compare with 1.61 million bpd in March and 1.57 million bpd a year earlier.

Imports from second-largest supplier Russia rose a more modest 4 percent last month from a year earlier, with cargoes booked before western governments toughened sanctions over Russia’s invasion of Ukraine in late February.

Russian oil arrivals in April totalled 6.55 million tons, or 1.59 million bpd, data showed, up slightly from 1.5 million bpd in March and 1.53 million bpd a year earlier.

China’s overall crude oil imports last month rose nearly 7 percent on the year, its first rise in three months, although widespread COVID-19 lockdowns crimped fuel demand and dampened refinery output.

Friday’s data showed zero imports in April from Iran. However, customs next month is likely to report for May the import of nearly 2 million barrels of Iranian oil that was being discharged this week into a reserve base in south China.

Despite US sanctions on Iran, China has kept taking Iranian oil passed off as supplies from other countries. The import levels are roughly equivalent to 7 percent of China’s total crude oil imports.

Iranian oil, often priced lower than competing grades, have squeezed out rival supplies such as from Brazil and West Africa.

Customs reported zero imports from Venezuela, as state oil firms shunned purchases since late 2019 for fear of falling afoul of secondary US sanctions.

Imports from Malaysia, often used as a transfer point in the last two years for oil originating from Iran and Venezuela, jumped 84 percent on year to 2.165 million tons, the second highest on record.


Saudi tourism ministry signs deals to boost localization program

 Saudi Arabia’s Ministry of Tourism signs two agreements. (Twitter/@Saudi_MT)
Saudi Arabia’s Ministry of Tourism signs two agreements. (Twitter/@Saudi_MT)
Updated 20 May 2022

Saudi tourism ministry signs deals to boost localization program

 Saudi Arabia’s Ministry of Tourism signs two agreements. (Twitter/@Saudi_MT)

RIYADH: Saudi Arabia’s Ministry of Tourism has signed two agreements to enhance joint cooperation and support training and localization programs to qualify those wishing to work in the hospitality sector.
The move, which aims to support workers in the food, beverage and accommodation sectors, in support of achieving the Kingdom’s’ tourism human capacity development strategy.
Bandar bin Mohammed Al-Safir, director general of training and localization at the ministry, stressed that these two agreements aim to develop human resources in the tourism sector through quality training programs that will contribute to developing localized skills in the tourism sector.
Under the two agreements, which were signed with Kempinski Al-Othman Hotel and Carlton Al-Moaibed Hotel, the ministry will support dualifying Saudi nationals in the tourism sector within the “Your Future has Arrived” initiative.


Venture capital and microfinance firms should focus on startups, says Al Ahli Holding Group CEO

Venture capital and microfinance firms should focus on startups, says Al Ahli Holding Group CEO
Updated 20 May 2022

Venture capital and microfinance firms should focus on startups, says Al Ahli Holding Group CEO

Venture capital and microfinance firms should focus on startups, says Al Ahli Holding Group CEO

DUBAI: Mohamed Khammas, CEO of Al Ahli Holding Group, said that startup businesses are an excellent opportunity for investment in venture capital funds and microfinance banks.

During an interview with Arab News at the Top CEO event in Dubai, Khammas Mohamed Khammas, CEO of Al Ahli Holding Group, highlighted that startups are a good investment idea because the “ticket size is smaller, and the product ranges are higher.”

Khammas pointed out the risks that arise for startups are not in their early stages but rather when they become successful.

“The challenge is not when they’re trying to have a major impact on the economy; the problems occur when they become successful. All of those are calculated risks,” he said.

Khammas continued to add that regardless of these risks, investing in new, innovative startups is “absolutely the best opportunity.”

Also, during his talk at the event, Khammas  urged banks to fund new and innovative products and ideas in the area after he shed light on how banks are hesitant to invest in creative ideas.