A promising future for the UAE’s financial sector

 

 

Over the course of the last few years, we have seen the financial sector in the UAE evolving at a rapid pace. This sector is set to grow further with the country’s economic prosperity.

“UAE markets being upgraded from a frontier market status to an emerging market classification by the MSCI is indisputably the most important news for the financial sector for the past couple of years,” said Fathi Ben Grira, CEO, Menacorp in an exclusive interview with Capital Business.

 

“There is also a very healthy pipeline of IPOs around the corner. UAE markets suffer from the lack of diversification in terms of sectors represented (mainly banks, insurances, companies related to the real estate sector and telcos). With these IPOs, such as the spin-off of Emaar retail activity, the “real economy” of the UAE will have a better representation on the market,” he added.

 

The financial industry in this country is still growing and the progresses are substantial. Fathi emphasized on the idea that UAE markets are really young and a lot of work needs to be done to achieve better quality in terms of transparency and disclosure especially from listed companies. “The recent Arabtec drama, during which billions in valuation were lost in a couple of weeks, was a wakeup call: despite real achievements, we are still far from the level of transparency enjoyed by more established markets.”

 

When asked about the opportunities this sector hold for the country, Fathi reaffirmed that this sector is still young and the products offered are quite limited noting that the upside can only be important. “This is a great opportunity for the UAE as the country is at the center of the oil and gas rich GCC but also emerged as the safe haven for the whole region thanks to its political stability and its strong regulatory framework.” He continued, “The challenge is now to reach the next level and become a global center rather than a regional platform for financial services firm. Singapore was quite successful in achieving this transition and I am convinced that the UAE has what it takes to do the same.”

 

Menacorp: adding value to the financial sector

 

Menacorp aims at realizing continuous growth through the thorough application of its philosophy “Values Creating Value”. “Menacorp has a very unique position. Our company fully complies with international standards and best practices and at the same time perfectly understands that our clients (mostly GCC based) are different from investors based in London, Frankfurt or New York. We have a total of 3 billion USD of client deposits, most of it coming from GCC based HNWI and family owned conglomerates, but at the same time we deal on a regular basis with top international institutions such as Bank of America, Merill Lynch, Deutsche Bank or Credit Suisse. We are bridging two worlds’, two cultures,” noted Fathi.

 

The firm invested a lot in its people and has now one of the best teams of professionals in the country.

Menacorp’s priority is to be stronger in securities brokerage. The company will be offering more markets and more products to its investors with an aim to be one of the top players in the IPO market. Moreover, through the hard work and commitment of its specialists, Mencarop has been helping MENA based companies raise capital. Since 2013, UAE markets have achieved strong performances and several companies want to take advantage of such a favorable environment to raise money through an IPO. “We are assisting several of our clients in that process. However, we are extremely careful in the choice of companies we decide to list: not all of them are eligible and a decent equity story is a must.”

Elaborating furthermore, Fathi said, “At the MENA level we are encouraging and assisting companies based outside the UAE to list on the Nasdaq Dubai. This exchange, unlike the DFM and ADX, accepts primary listing of foreign companies. Let’s take the example of a successful Egyptian company that needs to raise money for its international expansion: a listing on the Nasdaq Dubai ticks all the right boxes. This company will benefit from a state-of-the-art platform and regulatory framework, a listing in US dollars, an easy access to the cash rich investors based in the GCC as well as to international institutions thanks to the strategic location of the Nasdaq Dubai in the heart of the DIFC.”

 

When questioned about his opinion about the impact of the Expo 2020 on the financial market, Fathi is confident that Expo 2020 has a positive impact on the financial market. “First, it was one of the catalysts bringing back the investors to the financial market. To be more accurate, the upside of Expo 2020 was priced in by the investors even before the official announcement of the UAE winning its bid. Second, it’s a guarantee that major infrastructure spending will be realized. This will boost the economy and will ultimately be reflected by the financial markets.”

 

Talking about what the future holds for the financial market, Fathi positively declared, “I think we are heading in the right direction, especially with IPOs such as the one announced by Emaar. However, as long as UAE markets don’t have a proper market mechanism and more financial products to be offered, these markets will remain underdeveloped. Our markets should look like our buildings. By that I mean that the UAE is known all over the world for its world class towers and infrastructure: it should be the same for its markets.”

 

 

About Fathi Ben Grira

Fathi Ben Grira is the Chief Executive Officer of Menacorp. He has been leading the company’s operations and expansion since 2010.

He started his career within the US law firm Skadden, Arps, Slate Meagher & Flom LLP where he worked on complex cross-border M&A transactions, international securities offerings, and privatizations. He then joined leading investment bank, Lazard within the Merger & Acquisition and Capital Markets team.

During his corporate lawyer/investment banker years, Fathi worked on numerous deals and assisted clients on several highly sophisticated transactions.

Fathi has a Master’s of Science in Management from HEC Paris Business School. He also holds a Business Law degree from the University of Paris Pantheon-Sorbonne.

Fathi can be contacted at: f.bengrira@menacorpfinance.com

 

 

 

*By jenny Kassis

 

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