Alkhair Capital Saudi Arabia opened an office at the Dubai International Financial Centre (DIFC) on 20 April 2014, following approval from the Dubai Financial Services Authority (DFSA) for a Category 4 license that allows the firm to operate as an authorised entity from the DFSA. Alkhair Capital Saudi Arabia is the first Saudi Investment Institution registered and licensed by the Capital Market Authority in Saudi Arabia to be granted a license to operate in the DIFC.
The new branch will help to expand Alkhair existing services to corporate and institutions offering a unique set of advisory and execution services to its clients. "We are delighted to be basing ourselves at DIFC to launch our operations in the UAE and beyond regionally, and we look forward to delivering our clients a full range of investment banking services and advisory services," said Alkhair Capital Saudi Arabia Chairman Yousef Al-Shelash.
Khalid Almulhim, Chief Executive Officer of Alkhair Capital Saudi Arabia added, "This step is taken after a detailed study of the market needs and the position of Dubai as a regional Islamic finance hub; in addition to the current projects in the pipeline that will have a significant demand on the Sukuk market. Alkhair Bank Group has differentiated itself in the market by issuing many Sukuk programmes as well as other debt capital market instruments during the past years; as a result, the presence of Alkhair Capital in Dubai will certainly add value in this field."
Alkhair Capital Saudi Arabia commenced operations in the Kingdom of Saudi Arabia in August 2009. Its business model is built around three core business lines: Asset Management, Brokerage, and Corporate Finance & Investment Banking. The firm's major shareholder is Bank Alkhair. Founded in 2004 and headquartered in Bahrain, Bank Alkhair is an Islamic wholesale bank with subsidiaries in Malaysia and Turkey. The Bank is also a major shareholder in Burj Bank, Pakistan.
The firm held a Gala Dinner at Jumeirah Emirates Towers, Dubai on 1 May 2014 to celebrate its DIFC licence and the launch of the Dubai entity, Alkhair Capital [Dubai] Limited. In his keynote speech at the event, Al-Shelash said, "The approval from the Dubai Financial Services Authority and our new branch at DIFC is a major step forward in our growth strategy across the region. Over the years, we have differentiated our service offerings and we are glad to bring our expertise and industry knowledge to DIFC, in line with our envisioned future."
A HUB AND A GATEWAY
"As a company, we have analysed the market needs and evolution of Dubai as a hub for Islamic finance, which is our forte. The burgeoning demand for Sukuk instruments is an encouraging sign of the market demand and potential in the coming years. We are confident that Alkhair will be able to add value to the industry as a whole with our presence in Dubai."
In private conversation Al-Shelash added, "Dubai, for us, is a gateway to the GCC market and the international market... the Saudi market is the biggest market in the Middle East, not just in the GCC. There are a lot of foreign investors looking for opportunities in Saudi Arabia and, on the other hand, there are a lot of Saudi people looking to diversify their portfolios outside Saudi so these are the areas that Alkhair Capital will target. We are a local financial entity so we know the local people and the local market. We know their needs. At the same time we have international standards, that's why we believe we will be unique."
Al-Shelash also believes Alkhair will clearly benefit from being a Shari'ah- compliant institution, describing it as a 'solid' advantage. He said, "A lot of Saudi, most of the investors prefer Shari'ah structures. If you can provide them with Shari'ah structures it's better for them than conventional structures." He also noted the special requirements of local business communities and business families, saying, "We can provide them with this, we know exactly their needs."
Looking to the broader group, Al-Shelash noted that Bank Alkhair's business in Malaysia is a retail bank, operating as 'a different set up and different business model' but added 'there is synergy between the group in Turkey, Malaysia, Saudi Arabia, in Bahrain and now in Dubai'.
Asked about the prospects for establishing a retail banking operation in the GCC, Al-Shelash said, "In the GCC yes, maybe a retail business in Bahrain, but in Dubai no, it's an investment bank at least for the near future."
His comments suggest that the group at large is still considering its options in retail banking despite the failure earlier this year of its merger talks in Bahrain with Khaleeji Commercial Bank. On 24 March 2014, the two groups dropped their plan to merge after failing to agree on terms, Khaleeji said in a statement to the Bahrain Bourse. The primary reason given as to the failure of the merger was a non-agreement on the structure and the valuation of the deal between the two banks. They had been in talks since June 2013.
Al-Shelash ended on a strongly upbeat note, saying, "This year I am so optimistic. 2014 will be the best year since 2008. In 2009 and 2010 there was the international crisis and then in 2011, 2012 a lot of instability in the region but now investors feel safer, they are comfortable to invest, I am so optimistic this year!"
In addition to being Chairman of Bank AlKhair and Alkhair Capital Saudi, Yousef A. Al-Shelash is the Chairman of Dar Al-Arkan Real Estate Development Company (Dar Al-Arkan) in Saudi Arabia. Previously, he served as a member of Investigation and Attorney General in Saudi Arabia, as well as a legal advisor to various legal consultancy firms in Saudi Arabia. He obtained an MSc in Law and Legal Proceedings from the Institute of Public Administration Al-Riyadh and a BSc in Shari'ah from Mohamed Bin Saud Islamic University, Saudi Arabia. He has received formal training in financial management and evaluation of investment projects and also has earned diplomas in both Banking and Combating Financial Crimes. Al-Shelash is one of the pioneers of the real estate development industry in the Kingdom of Saudi Arabia, beginning over two decades ago in the early 1990s. He also initiated the real estate mortgage industry in Saudi Arabia in 1998.