English - Global Investment House

Global GCC Islamic Fund
Revealing investment
opportunities
one after the other
Issue No.31 - April 2010
In a deal seeing Bharti acquiring Zain Africa
Global acts as the Regional Lead Advisor for one of the largest
transactions in the world worth USD 10.7 billion.
Global Investment House “Global” is acting as the Regional
Lead Advisor for Bharti Airtel in acquiring Zain Africa
(excluding Morocco and Sudan) in a deal worth USD 10.7
billion. The transaction is considered one of the largest
deals not only in the region, but in the world.
The final agreement was signed
between the two parties in
Amsterdam on Tuesday, March 30,
2010 in the presence of Mr. Nasser
Al-Kharafi, Chairman, Al-Kharafi
Group, Mr. Bader Nasser Al-Kharafi,
Vice Chairman, Al-Kharafi Group,
Mr. Asaad Al-Banwan, Chairman
of the Zain Group, Mr. Nabil Ben
Salama, CEO of the Zain Group, Mr.
Sunil Bharti Mittal, Chairman and
Managing Director, Bharti Airtel and
Mrs. Maha Al-Ghunaim, Chairman
and Managing Director of Global.
In an interview with CNBC Arabia,
Mrs. Al-Ghunaim revealed the
details of the birth of the sale of Zain
Africa to Bharti Airtel and Global’s
role, saying: "Our role began years
ago when major shareholders of
Zain expressed their interest to
sell their shares in the company.
Global believes that the sale of Zain
Africa is a good opportunity for all
shareholders."
Mrs. Al-Ghunaim added "Through
our relationship with different parties
in India and mainly Mr. Sunil Mittal,
Chairman of the Bharti Group, we
found a common interest to both the
seller and the buyer."
For the seller, managing the African
operations was putting them under
pressure due to the large ramifications,
which consists of operations in more
than fifteen countries with multiple
telecommunications legislation in
addition to the currency fluctuation
and the need for exceptional efforts
to manage these operations. The
financial crisis has urged everyone
to focus on their key markets and
accordingly selling the African
operation was the right decision.
As for the buyer, Bharti Airtel, the
acquisition of Zain Africa was a
great advantage, especially after
previous failed attempts to enter the
African market through MTN. It is
an opportunity for them to expand
their business outside the highly
competitive Indian market.
Mrs. Al-Ghunaim said that this gave
Global the opportunity to put both
parties together, one that looks at the
selling deal as a short and medium
term strategy and the other shares
similar interest in the acquisition
and this is what made the negotiation
process easier.
She added, "Bharti was regularly
monitoring Zain and especially after
the failure of its deal with MTN, where
Zain has become the alternative."
On the nature of the role played by
Global after the success in putting
the two parties - buyer and seller
- together, Mrs. Al-Ghunaim said
“Global’s role was to facilitate and
coordinate the negotiations between
the two parties. Since Bharti needed
a regional advisor who has the
experience in Investment Banking
and with the track record of Global
as one of the leading Investment
Mr. Sunil Mittal, Mr. Bader Al-Kharafi, Mrs. Maha Al-Ghunaim & Mr. Nasser Al-Kharafi
Banks in the region and its strong
relationships with both parties, it was
natural that Global will act as the
intermediary in this transaction. We
facilitated the meeting between Sunil
Mittal and the major shareholders of
Zain, and after the first meeting, the
negotiations began to walk on in full
swing."
On the benefit of Global from this
transaction, Mrs. Al-Ghunaim said
“The effect of this transaction on
the moral is more importance than
the financial return, as it reaffirms
Global’s role not only as a regional
leader in Investment Banking, but
also internationally. The presence and
the contribution of a local company in
the success of one of the largest deals
in the telecommunications industry
in the world has been noticed and is
a source of pride for us as a Kuwaiti
company.
Mrs. Al Ghunaim said "We thank our
client Bharti, who showed confidence
and believed in Global’s capability
as a Regional Lead Advisor in the
transaction, which is considered
one of the biggest transactions not
on the regional level, but on the
international one. We also thank the
major shareholders of Zain Group,
the Board and the management for
the constructive cooperation they
have shown during the negotiations
process."
Mrs. Al-Ghunaim concluded "The
current time is the most appropriate
for such transactions and is not
appropriate for establishing new
companies, giving the associated
risk. Today, the Investment Banking
business is focusing on the integration
of efforts and reducing cost to create
new and stronger entities. I expect
more mergers and acquisitions within
the Kuwaiti market and perhaps
on the regional level but not of
such magnitude as the Zain Africa
transaction."
Global’s debt restructuring
“Most Innovative Deal”
Euromoney - February 2010
Issue No. 31 - April 2010
S&P Assigns ‘A’ Rating to
Global Equity Funds
The S&P fund ratings are a widely
acknowledged measure of excellence,
with A rating awarded only when
“The fund demonstrates high
standards of quality in its sector
based on its investment process
and management’s consistency of
performance as compared to funds
with similar objectives.”
Two of Global funds namely Global
GCC Large Cap Fund and Global
GCC Islamic Fund were awarded
Standard & Poor’s A (New) fund
management rating.
The Global GCC Large Cap Fund
is Global’s flagship fund and offers
diversified exposure to large cap stocks
listed on the GCC exchanges. The fund
invests in multiple sectors and growth/
value categories. The Global GCC
Islamic Fund has a similar mandate to
that of the GCC Large Cap Fund, but
it only invests in Shariah compliant
securities. The funds managed
by Global adhere to a disciplined
investment process based on bottomup stock selection methodology
along with a macroeconomic overlay
to identify growth opportunities
throughout the region.
In awarding the ‘A’ fund management
rating, Standard & Poor’s observed
that funds performance has been
largely driven by market timing
during the correction in Q1 2009,
raising cash and rebalancing the fund
allocation towards more defensive
names. The re-entry into cyclical
names early in the recovery cycle also
contributed positively towards the
funds’ performance.
The rating agency also noted that
Shahid Hameed, Head of Asset
Management at Global, is one of
the most experienced managers
they cover in the region and were
reassured by the fact that the funds’
performance has been solid relative
to their respective benchmarks and
peers during his management.
Mr. Bader A. Al Sumait, the CEO of
Global, commented, “We are pleased
to receive fund management rating
from Standard & Poor’s. The rating
underscores our disciplined and well
thought-out investment process and
reaffirms confidence in our research
methodology and risk management
philosophy.” Mr. Bader went on
to add, “Our pro-active initiatives
coupled with prudent investment
policies have allowed us to generate
superior risk-adjusted returns across
various investment products.”
Global’s debt restructuring named
“Most Innovative Deal” by Euromoney
Global received the “Most Innovative Deal” award by Euromoney for the
Islamic tranche of its debt restructuring, which was signed on 10 December
2009 with a group of 53 banks. Global became the first company in the region
to conclude a USD 1.7 billion multi-currency and a multi-tranche (Islamic,
conventional and bilateral) debt restructuring.
Mr. Sunny Bhatia, Chief Financial Officer at Global received the award
at the Euromoney Islamic Finance Awards ceremony, held on 23 February
2010 at the Landmark Hotel in London. The award was in recognition for
Global’s professionalism and transparency in dealing with the banks during
the restructuring process, and for the innovative structure of the deal which
has enhanced the stability of Global’s financial platform.
Mr. Bhatia said, “Global’s tremendous efforts, professionalism and
transparency throughout the process of debt restructuring were commended
by the overwhelming majority of the financiers and their steering committee.
We are delighted to receive this award from Euromoney in recognition of that
fact.”
He concluded by thanking Global’s lenders, their steering committee and the
restructuring advisors for their belief in Global’s inherent strengths and for
their commitment and hard work in concluding the debt restructuring process.
e-global offers you access to:
View your total holdings (assets and liabilities).
View realized and unrealized gain/loss statement.
View and download historic information.
Analysis of your portfolio holdings such as asset allocation, currency
exposure, and assets vs. liabilities.
View all pending trades including securities trades, foreign exchange
and money market deals and funds transfers.
Personal e-mail for fast and secure communications.
To apply for e-global, please visit our website on www.globalinv.net.
Issue No. 31 - April 2010
Global unveils its new & revamped website
the latest technologies to establish a
dynamic and comprehensive website
environment allowing visitors easy
navigation through its pages.
Global unveiled its newly redesigned
website www.globalinv.net. The easyto-navigate website offers visitors
quick access to information about
Global and its products and services.
Designed with a focus on usability,
the website has been developed using
Mrs. Nora Al-Suwaiti, Senior Manager,
Marketing & Communications at
Global said “This is part of our ongoing
process to enhance our stakeholders’
experience when visiting the website.
Whether they are clients, shareholders,
media or anyone interested to know
about the company and its products
and services, we are confident that
they will experience an easy surfing.”
The new website structure is client
focused, reflecting the new strategy
adopted by the company, which
focuses on its core businesses: Asset
Management, Investment Banking
and Brokerage.
On the other hand, the Investor
Relations section has been enhanced
to provide shareholders with more indepth information on the company
and its performance.
Mrs. Al-Suwaiti concluded by saying,
“Ongoing developments will be
witnessed on the website and the first
addition will be a new service offered
to our clients in the near future.”
...and unveils e-global, a new online service to its clients
In addition, Global unveiled its new
online service “e-global” which allows
its clients to view their portfolios and
account details, and get up-to-date
information online.
She added, “Launching e-global is inline with the company’s strategy and
ongoing efforts to enhance clients’
experience and offer added-value
products and services.”
Mrs. Rasha A. Al Qenaei, Senior Vice
President Wealth Management at
Global said, “e-global was designed
with the client’s convenience in
mind. The flexibility offered by
e-global enhances the services
Global offers by enabling clients to
access their account information in a
secure, user-friendly and convenient
way.”
e-global, which uses a safe and
secure environment with a high level
of encryption, will allow clients to
view their daily statements. They can
also retrieve historical information
on their portfolios such as the cash
transactions and previous months’
portfolio statements.
The service also offers clients an
analytical tool to their portfolio
holdings such as asset allocation,
currency exposure as well as assets
vs. liabilities.
In addition, the service facilitates
communications between clients
and the client service team through
a personalized e-mail for each client
to ensure quick answers to clients’
queries.
Mrs. Al-Qenaei concluded, “Clients
can apply for the e-global service
online simply by visiting the
company’s website and completing
the online registration. Global’s Call
Center representatives are on hand
and can provide assistance on the
various features available online.”
among 148 brokerage companies in Egypt
Global Investment House Securities ranked 19
Global Investment House Securities
Egypt (Global Securities) has achieved
a major breakthrough and was ranked
19 among 148 brokerage companies in
Egypt for 2009, as disclosed by Cairo
Stock Exchange.
achievement saying, “The results we
have realized confirm the importance
of Global’s role in the Egyptian market
as we continuously seek to meet our
clients’ various needs.”
Global Securities’ trading increased
by EGP 580 million in 2009 to reach
EGP 6.78 billion, representing a
1.16% market share. As a result, the
company’s ranking moved from 28 in
2008 to 19 in 2009.
In line with the company’s growth
strategy, Global Securities has
already introduced brokerage services
for our clients outside Egypt this year
as the company seeks to reinforce
the continuous development of its
products and services.
Mr. Mohamed Hussain, Managing
Director of Global Investment
House Securities commented on this
Mr. Hussein concluded, “I would like
to express my deep gratitude to our
clients for their confidence in us. I
would also like to thank the Global
Investment House Securities team for
their commitment, and congratulate
them for this achievement as they
are behind this exceptional success
through their professional attitude
and effort to provide quality services
and ensure client satisfaction.”
Global Investment House Securities
is a subsidiary of Global Investment
House in Egypt with a capital of EGP
20 million. The company aims to
provide both online and margin trading
services in 2010, and will continue
strengthening its presence in the GCC
region.
Issue No. 31 - April 2010
Global awarded “MENA Firm of the Year”
by Private Equity International
Global was awarded “Middle East
and North Africa Firm of the Year” in
the PERE Awards 2009, organised by
Private Equity International.
Global was recognised by PERE and
PERENews.com readers to be one of the
organisations that overcame the adverse
effects of the property downturn and
made cash distributions to investors in
its real estate funds in 2009.
Firm of the Year” Award was granted
to Global in recognition for its
commitment to clients, which became
apparent in August 2009 when Global
distributed 6.5% cash dividends to
investors in its property fund, Global
MENA Ijarah Real Estate, making it
the third quarter of dividends in a row.
The fund made positive gains although
a number of projects in the region were
delayed, cancelled or scaled down due
to lack of bank credit and inadequate
liquidity, and called 40 percent of its
committed capital in 2008, which it
had invested in two projects in Dubai
and Kuwait.
Mr. Rajiv Nakani, Head of Alternative
The organiser stated that the “MENA
It is worth mentioning that in 2009
Asset Management at Global said,
“Receiving this award is a great
honour, because it highlights the
confidence of PERE and PERENews.
com readers, who represent leading
institutional investors, in Global’s
ability to overcome challenging market
conditions and fulfil our obligations
towards our clients.”
Global paid over USD 50 million to
investors in its various funds, despite
the tough economic situation the
region faced last year.
PERE magazine and its news website
PERENews.com are published by
Private Equity International (PEI),
the leading financial information
group dedicated to the alternative
asset classes of private equity, real
estate and infrastructure globally.
Mr. Nakani concluded, “This
award reflects the industry leaders
and investors’ recognition of our
commitment to clients regardless of
market conditions.”
Global manages the private placement of
Air Transport & Tourism Investment Company
placement
would
take
place
throughout February 2010 during
which 5 million shares will be offered
for a nominal fee of JD 1 per share
to reach ATTIC’s authorized paid-up
capital of JD 10 million.
He also expressed his confidence
that this private placement will be
well received by the investors as
good investment opportunities in the
transport and tourism sector are quite
rare despite the sector’s projected
growth in Jordan and the region.
Global in Jordan announced the
commencement of the private
placement of Air Transport & Tourism
Investment Company (ATTIC), the
first low-cost carrier in Jordan.
Following the agreement signed
with RUM Group for Transportation
and Tourism Investment Co, Global
was mandated to perform a financial
advisory and valuation for Petra
Airlines (owned by RUM Group and
other investors). Based on the valuation
report, ATTIC was established with an
authorized paid up capital of JD 10
million.
The deal was announced during
a meeting held at Petra Airlines’
new offices, which was attended by
Mr. Riad Khashman, Chairman of
RUM Group and Mr. Osama Assaf,
Investment Banking Manager at
Global in Jordan.
Mr. Assaf stated that the private
Mr. Riad Khashman, Chairman of
RUM Group said, “ATTIC will play
an integral part in developing Rum
Group’s investment while contributing
to the increase in the number of tourists
visiting Jordan.”
Mr. Khashman added, “ATTIC will
benefit from Jordan’s open skies policy
and other developments in the tourism
sector in Jordan, such as the expansion
of the Queen Alia International Airport
and the economic development of
Aqaba. These factors will contribute
in the company’s success, which in
turn provides an excellent investment
opportunity despite the prevailing
worldwide economic conditions.” RUM Group for Transportation
and Tourism Investment Co was
established as a public shareholding
company in May 2006 with a paid-up
capital of JD 8 million. It owns Rum
Tours and Rum Hotels in addition to
Zuwar Investments (Petra Airlines),
a private aviation company that will
create a new charter airline service
specialized in covering short-haul
destinations, and become the first lowcost carrier in Jordan.
Rum Group’s activities focus on a
wide range of touristic services that
includes, but are not limited to hotel
accommodations, tourist agencies,
transportation services, as well as
promoting and selling different
touristic programs abroad.
Issue No. 31 - April 2010
Global expects the GCC countries to post
reasonable growth in 2010
The GCC region also felt the impact of the worldwide recession, which was once at odds from the international economy.
But with the revival in the oil prices; we expect GCC countries to post modest growth in 2010. GCC countries had
accumulated vast surpluses over the recent years due to burgeoning oil prices enabling them to employ powerful countercyclical fiscal policies. Therefore, infrastructure spending is believed to underpin fast recovery in the economy for countries
like Saudi Arabia, UAE (Abu Dhabi in particular) and Qatar which have both the ability to spend and the willingness to do
so as well. GDP growth would be topped by Qatar at 18.5% followed by 3.8% and 3.7% in Oman and Bahrain. UAE and
Kuwait are also expected post growth of 2.4% and 3.3% in 2010 respectively.
GCC countries trading at
attractive multiples
The GCC, as per our coverage, is
trading at a P/E multiple of 10.4x
which is at a very tempting discount
to the BRIC countries. Figures reveal
that UAE and Qatar are trading at an
excessive discount to the GCC 2010e
P/E multiple and therefore offer
enticing upward potential. Qatar’s low
P/E multiple seems more pronounced
given the fact that it has a high ROE
(36%; the highest in the GCC). While
UAE’s expected ROE is slightly
below-average and that the country
may be deemed to offer higher risk
than its regional peers, we believe
that the magnitude of the discount
does not reflect UAE’s potential
fairly. Building on the understanding
that investors’ fears may have been
overblown, we believe that that the
country does offer a good investment
opportunity.
Robust earnings-growth story:
KSA and Qatar are top of the
line
to higher than anticipated corporate
profitability for Kuwait.
Recuperating from a tough 2008 &
2009, based on our coverage, we
believe that Saudi Arabia & Qatar
offer an attractive earnings growth
story for the year 2010. Saudi Arabia
is expected to lead the pack with
a spectacular bottom-line surge of
36%YoY while UAE is expected to lag
behind in 2010 with a slower 8%YoY
growth. Earnings growth figures for
Kuwait may not be truly indicative of
the overall market given that a large
segment of corporate profitability
emanates from investment companies
and firms engaging in real estate
investments, which remain exclusive
of our research. These companies are
expected to make losses in 2009 but
as market conditions improve in 2010,
investment and real-estate firms are
expected to post better results leading
Qatar & Saudi Arabia to steal
regional focus, UAE is also a
contender
Based on our economic forecasts,
corporate earnings growth expectations
and gauging rerating on P/E in certain
markets, we have developed a bullish
view over Qatar and Saudi Arabia.
UAE markets are also expected to
fare relatively well, but fluctuations
emanating from uncertainty related
to Dubai-based conglomerates are
expected to keep the market bouncy
and investors at their toes.
Risk to Valuations
(1) Double dip recession in the West
may lead to fluctuations in oil (and
gas) price, which is the defining
product for most GCC economies.
(2) Real estate downturn is still
continuing in some key GCC cities
which can have a severe impact on
corporate profitability especially that
of cement companies and of banks
exposed to the said sector through
investments or through loans.
(3) Any unseen events such as corporate
defaults (e.g. Sa’ad & AlGosaibi and
Dubai World), regulatory changes
(e.g. changes in provisioning rules for
banks etc.) can significantly impact
the direction of profitability and the
risk associated with a given sector
and even a country depending on the
magnitude of the impact.
(4) Geopolitical issues prevalent in
the region (e.g. the current situation in
Yemen and in Iran etc.) may raise the
risk perception of a country or region
and keep investors away.
Global GCC Large Cap Fund
A Leading Investment
The outstanding performance of the Global GCC Large Cap. Fund
and its unique investment strategy make it the ideal tool to invest in
the GCC markets.
The fund is managed by a team of professional fund managers and
invests in the leading companies in the GCC region.
Issue No. 31 - April 2010
Global Lounge opened at College of Engineering and Petroleum
Global opened the “Global Lounge”
at the College of Engineering and
Petroleum at Kuwait University,
Khalidya Campus. The Lounge
will provide students a relaxing
environment to rest between their
daily lectures.
The opening was attended by Dr.
Khaled Al-Fadhel, Manager –
Guidance & Counselling Office
at the College of Engineering
and Petroleum, Mr. Moustafa
Zantout, Head of Marketing &
Communications at Global, and Mr.
Ahmed Al Huwaishel, Executive
Manager and Official Spokesperson
of the Engineering and Petroleum
Student Association, along with a
number of students.
Dr. Khaled Al-Fadhel said, “The
Association is constantly seeking to
role it plays towards the community
and students.
Mr. Zantout stated, “Global’s interest
in supporting the students is part of the
company’s commitment towards the
community in general and the younger
generation in particular, and the Lounge
is a modest contribution.” He added,
“Global’s role towards students is not
limited to the Lounge. We regularly
organise seminars and lectures aiming
primarily to put economic theories into
real life practices.”
provide the best services to students
and we are grateful for Global’s
continuous support as an active member
of the community. The Global Lounge
will provide an appropriate relaxing
environment for students to meet and
socialize with their colleagues.” Dr. AlFadhel thanked Global for the major
Global partners with INJAZ for the Creation of Economic
Opportunities for Jordanian Youth
Jordan said ”We are glad to be part
of the Jordanian enhancement and
development programs for the youth
that widens their knowledge and
vision and prepares them for the
upcoming challenges.”
Mr. Al Huwaishel said, “The
Engineering and Petroleum Student
Association seeks to provide the best
facilities to students.” He thanked
Global for regularly taking initiatives
to support the students and concluded
by promising the students more
achievements in the near future.
Global Saudi
Equity Fund
(Al-Noor)
Adding, “We are pleased to pass on
our experience to the community and
enforce the partnership between the
public and the private sector.”
Aligned with its strong sense of social
responsibility; Global in Jordan
participated with INJAZ for the
Creation of Economic Opportunities
for Jordanian Youth through the
participation of the company
employees to conduct INJAZ courses
for 10th graders in “Al Hussein
School for Girls” during the period of
the second semester.
This gesture stems from Global’s
belief in the partnership between
the private sector and civil society
organizations for the well being
of the Jordanian community. In
addition, this partnership reflects the
company’s message and its support
to develop the education sector and
provide the community with equal
opportunities to excel in different
fields of interest.
During this volunteer program, Global
employees will conduct courses about
different subjects and present to the
students the importance of leadership
and its impact in developing their skills
professionally and socially, and how to
acquire and develop those leadership
skills focusing on the importance of
mastering them.
Commenting on the company’s
involvement, Ms. Dalia Adawieh,
Marketing Manager at Global in
From his end, Mr. Muhannad
Jarrah, INJAZ Deputy CEO for
Operations, said, “We would
like to thank Global in Jordan
for providing INJAZ programs
with highly qualified volunteers.
INJAZ seeks to promote the
culture of volunteerism through its
partnership with the private sector;
for INJAZ believes in the profound
impact volunteerism has on the
Jordanian youth.”
INJAZ is a national non-profit
organization funded by the USAID.
It offers various programs to school,
university and community college
students across the country to
inspire and prepare them to become
productive members of their society
and succeed in a global economy.
Achieve long term
capital growth with
controlled levels of risk