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Global Investment House looks to enter Malaysia in 4th quarter

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Points of Essence:

  • Kuwait’s Global Investment House planned to start a financial services firm to deal in investment banking, asset management and brokerage in Malaysia this year.
  • The group will also expand to Saudi Arabia and Qatar soon.
Published: Monday, 11 August, 2008, 01:38 AM Doha Time

KUWAIT: Kuwait’s Global Investment House has said it wants to start a financial services firm in Malaysia this year as part of an expansion plan that also includes new forays in the booming Gulf region.
Kuwait’s biggest investment bank by market value is in talks with a partner in Malaysia to set up the firm in the fourth quarter, chief financial officer Sunny Bhatia told Reuters, declining to identify the partner or give details.

“It will be investment banking, asset management and brokerage,” he said in a recent interview, declining to be more specific.

Gulf Arab companies, awash with cash after riding a regional economic boom spurred by high oil prices, are moving into Asia to diversify their revenue streams.

Kuwait Finance House, the Gulf region’s second-biggest Islamic bank by market value, operates in Malaysia and Australia, while Global has various funds investing in Asia, including Chinese and Indian real estate.
Bhatia said Global was on track to set up an investment bank next year in the United Arab Emirates with local investment firm Al-Qudra Holding Co after it receives regulatory approval.

Global aims to get the approval by the end of the year so it can “focus on the real business” next year, he said.

Banks across the world’s top oil-exporting region have been expanding abroad as competition in home markets intensifies.

Global wants to start a brokerage business in Saudi Arabia “soon” and move into Qatar next year, making the oil-producing region the main focus of its expansion strategy, Bhatia said.

Global, whose second-quarter net profit soared 96%, aims to double investment banking fee income this year from 7.7mn dinars in 2007, he said.

In the first six months, investment banking fee income reached 11.5mn dinars.
“Investment banking is an area of focus for us and will remain so,” Bhatia said, adding that Global expected an “excellent” profit in 2008. The investment bank posted net profit of 91.4mn dinars last year.

“We are on track for growth…We are optimistic,” he said, declining to give a profit forecast for this year.
Global which offers advisory services and buys into firms, raised $1.15bn this year by selling global depositary receipts (GDRs) in London.

Assets were roughly flat at $9.4bn at the end of the first half but should rise after a recent string of share placements, he said. Global raised $600mn with partners to start a Saudi real estate firm.

In June, it also raised $500mn for a private equity fund listed in London to finance expansion in the Middle East.

Source: Reuters

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Written by Suapi Shaffaii

August 12, 2008 at 3:11 am

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