As one of the leading providers of asset management and brokerage services in Saudi Arabia, Alistithmar Capital helps its clientele to take advantage of the favourable local economic conditions amid the global recession and slow growth concerns. According to Yahya Al-Sulaiman, CEO of Alistithmar Capital: “Saudi Arabia is a land of opportunities, with a significantly young population, surplus income statements of corporates, with infrastructure projects accounting for over 50 percent of GDP in 2012 – one of the largest in the region and of the G20 nations.” He further added: “In case an investor hasn’t already considered this unique market, especially in such turbulent economic environments present globally, they should.”

The success of Alistithmar Capital has been due to many reasons. It has been continuously striving to provide the best of services to its clientele ahead of most of its competitors while creating value via its innovativeness and proactiveness. Historically, Alistithmar Capital has been among the top brokerage companies by volume reflecting Alistithmar Capital clientele’s recognition of its efforts. Some of Alistithmar Capital’s mutual funds covering GCC and Saudi markets are among the first to be launched in terms of type and style within the region, reflecting strong capabilities of identifying customer needs and devising unique solutions ahead of its competitors.

A shock-proof economy
Yahya Al-Sulaiman strongly believes that attention to detail in understanding and serving investor requirements are key requisites within his industry and Alistithmar Capital’s success is attributed to adherence to these requirements, enabling them to be among the top in the industry within Saudi Arabia. He further cited Alistithmar Capital’s qualified, multi-disciplinary and seasoned professionals with advanced know-how of the business as another key ingredient of the group’s success.

Alistithmar Capital’s professional capabilities and the conducive environment from which it operates creates a perfect growth formula, enabling the company to deliver a world-class service to its clientele. The Saudi market is one of the best-performing markets this year, with impressive results for the first quarter of 2012. However, unlike many other equity markets, the Saudi market rally was mainly driven on fundamentals backed by continually high oil prices rather than speculation on contingent events. Furthermore, with oil exports accounting for almost 90 percent of the government revenue, security and stability within the Saudi economy has been ensured for the foreseeable future. In addition, the Saudi government has approximately $550bn of reserves, adding further comfort for investors coupled with very low debt to GDP levels.

Consequently, the government has been using its vast wealth on infrastructure development to secure a higher percentage of GDP from non-oil sectors in the future, while leveraging benefits of favourable demographics within the country. Today’s strong fiscal stance, the resilient banking system, growth-centric policy on key economic sectors and the visible implementation of Saudi policies and welfare programmes has put the country on the right path for prosperity. As a result, impending external shocks that could arise as a result of a recessionary global economic environment would be of minimal impact.

Saudi Arabia takes stock
Tadawul Index, Saudi Arabia’s equity index, presently reflects an attractive dividend gap (ie dividend yield to money market yield) which is at historical highs, indicating opportunities for prospective investors. In addition, the market is also trading at approximately 16 times PE compared to the historical average of 17.5 times while PB value is at 2.1 times compared to the historical average of 2.6. Hence current valuations for Saudi markets appear very attractive.

In terms of the sectors present in the Tadawul Index, the banking sector accounts for the highest portion, representing approximately 30 percent of the index, which is well capitalised to absorb any headwinds that may emerge from the eurozone crisis going forward. The sector maintains over 100 percent provision coverage for non-performing loans and continues to build strong coverage ratios for deteriorated exposures, possessing low off-balance sheet items and carrying substantial exposure within the Saudi economy. At a period where many of the banks globally are deleveraging their balance sheets, the Saudi banking sector is actively assisting growth of the economy via controlled but aggressive lending.

Importantly, the petrochemical sector has the second-highest weight in the Tadawul Index (27 percent) and it accommodates the world’s biggest petrochemical company by market value (SABIC). Leveraging on the abundant low-priced feedstock and the logistical advantage of being closer to growing Asia, the Saudi Arabian petrochemical sector has presently evolved to being one of the leading and influential players in the global industry.

Expanding services
As iterated earlier, Alistithmar Capital primarily offers brokerage and asset management services to its clientele. The two service departments were initially formed under the Saudi Investment Bank name many years ago and were spun off as separate entities during 2007 because of regulatory requirements. Both these entities were later consolidated under the Alistithmar Capital name to provide a broader scope of services with the intention of deriving synergies through Integration. Presently Alistithmar Capital is in a great position to provide investment solutions for its clients’ brokerage and asset management needs.

Furthermore, Alistithmar Capital’s brokerage and securities business provides local and international share brokerage services together with the right facilities to make transactions on regional equity markets. Its eBrokerage platform AswaqNet extends services to online trading and other portfolio information services. Alistithmar Capital also provides custodial and marginal lending services to its clientele. In the asset management segment, Alistithmar Capital provides both mutual fund and portfolio management services. Some of the mutual funds managed by Alistithmar Capital have been ranked among the top in the region, coupling innovativeness and effectiveness to maximise returns to investors.

Alistithmar Capital was the first Saudi manager to launch a Gulf Coorperation Council (GCC) fund and the first to obtain an international rating when S&P assigned an A rating to the GCC Equity Fund of Alistithmar Capital.

Client-orientated focus
Alistithmar Capital’s portfolio management facilities offer both discretionary and non-discretionary portfolio management services, managed according to the needs of clients by offering a wide spectrum of investment profiles such as fixed income and balanced, growth. The asset management segment of Alistithmar Capital consists of a dedicated team of asset management professionals and is supported by a dedicated in-house research team. At present Alistithmar Capital has assets under management in excess of $1.1bn and intends to grow rapidly going forward.

In summary, Alistithmar Capital is emerging as a top-tier Saudi financial institution providing services related to brokerage and asset management with solid support from their parental company Saudi Investment Bank, one of the strongest banking entities in Saudi Arabia. A solid track record and many years of experience places Alistithmar Capital ahead of most of its competitors – proven by the Best Fund Management Company award allocated by World Finance in 2012.

As Yahya Al-Sulaiman concludes: “We strive relentlessly to exceed our clients’ investment objectives and service expectations to earn their trust. We set high personal and professional standards for ourselves and always endeavour to exceed our stakeholders’ expectations. I invite everyone to be part of our success story.”

For more information: www.alistithmarcapital.com; Tel: +966 1254 7666 Ext. 3300