Bahraini investment bank GFH Financial Group plans to cross-list on Saudi Arabia’s Tadawul stock exchange or list its Riyadh-based subsidiary GFH Capital directly on the Middle East’s largest stock exchange, the company’s chief executive said. announced.
“We have been working on this file in Saudi Arabia for some time and are considering two strategies,” Hisham Al-Rays said at the Fortune 500 Arabia online conference on Tuesday.
He said GFH Financial is working to meet International Financial Reporting Standards (IFRS) disclosure requirements as part of the listing process.
“If we can get approval in Bahrain, I think it will be very easy because we meet most of the requirements,” Al Rayes said.
Listed on the Bahrain Stock Exchange, Dubai Financial Market, Abu Dhabi Stock Exchange and Bursa Kuwait, GFH has assets of over $18 billion and operations focused across the GCC, North Africa and India. The company also has investments in the United States, Europe, and India. England.
Saudi exchanges have the highest volumes and valuations, making them natural targets for companies, Al-Rays said.
According to EY, Saudi Arabia ranked 11th in the world in the third quarter of this year in terms of the number of initial public offerings, with Tadawul and Nom Parallel Markets attracting 26 listings.
The listing raised $2.6 billion, making Saudi Arabia the 10th largest company in the world in terms of revenue.
“We see a lot of opportunity in the credit business right now and have started to focus on that environment. [high] It’s the interest rate,” he said.
“Interest rates are expected to remain high.” [and] This presents a great opportunity for lenders… [but it is] Not very attractive for equity participants. ”
GFH Financial reported a 33% annualized increase in second-quarter profits due to higher income from investment banking, treasury and proprietary investments.
Net income attributable to shareholders for the three months to the end of June increased to approximately $31 million.
Revenue from investment banking more than doubled during the reporting period to $45.4 million, while treasury and investment income increased 38% to approximately $26 million.
GFH is currently focused on accelerating the expansion of the group’s Middle East, Africa and GCC-based regional investment platform.
Earlier this year, the company acquired a majority stake in Big Sky Asset Management, a US real estate asset management company focused on the defensive healthcare sector.
GFH Financial’s sustainable infrastructure platform, Infracorp, is also co-investing in Finland’s proprietary electricity distribution network, Aurora Infrastructure.
Al Rayes said the company is “monitoring” the growing role of technology and artificial intelligence in the financial services sector.
“Saudi Arabia, Egypt and North Africa may have economies of scale that allow them to extract value from the technologies that are deployed, and to some extent so does the UAE,” Al-Rays said.
“For other GCC countries, return on investment is a little more difficult because they have a limited population, technology advances quickly and they need to catch up to keep pace with other providers.”
Updated: October 31, 2023, 9:46 a.m.